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Generalized valuation model

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Reference no: EM132240841

a. What is the price Mr A is willing to pay for a stock that pays a dividend of $5 per share annually and will be sold at $50 after two years according to Generalized Valuation Model? Mr A's required rate of return is 8%.

b. Explain why Ms. B is willing to pay a higher price for the same stock.

c. What is the value of the above stock according to Gordon Growth model if the dividend growth is 3%?

Reference no: EM132240841

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