Rate of return on levine company stock

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Reference no: EM131864002

Investors require a 15% rate of return on Levine Company’s stock (that is the required rate of return or Rs = 15%). The previous years’ dividend was $2 (that is Do = $2.00) and the dividend will grow by 5% for this year. (a) What is the value of the stock if dividends continue to grow at a constant 5%? (b) What is the value of the stock, if dividends are expected to grow at a constant rate of 10%?(USING EXCEL FORMULA)

Reference no: EM131864002

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