Stock based on discounted dividend model

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Reference no: EM131569534

Old Fashioned Curtain and Drapes just paid a dividend, D0, of $0.40/share on its common stock. Investors expect that its dividend will decline at a constant rate of 4% per year. That is, the expected growth rate g is -4%. They require a return of 15% on this stock. What is the value of this stock based on the discounted dividend model?

Reference no: EM131569534

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