Calculate the growth rate of dividends

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QUESTION - Matt is using dividend growth model to price common shares of DGM Inc which has just paid $1 of dividend this year. He finds that the price should be $20.4. DGM Inc. has a beta of 2 and risk free rate is 3%. If return on the market portfolio is 5%, calculate the growth rate of dividends.

Reference no: EM133017475

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