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Determine what is a fair value of the share today

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Reference no: EM132760066

Problem 1: A share just paid a dividend of $0.40. The dividend is expected to increase at an annual rate of 4% forever. If the required return is 10%, what is a fair value of this share today?

a. $0.42

b. $7.33

c. $6.93

d. $4.46

e. $6.67

Reference no: EM132760066

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