Determine the price of that same stock

Reference no: EM131951564

Question: Calculate the price of a zero growth common stock if it pays $1.50 in dividends annually and has an opportunity cost rate (as determined by the CAPM) of 14%. Now, use the constant growth model to determine the price of that same stock if dividends are expected to grow at an annual rate of 5%.

Reference no: EM131951564

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