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What is the projected dividend for next year

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Reference no: EM131167600

Company A has projected net income per share for this year at $2.00 per share. It has traditionally paid out a dividend of 30% of its net income. Income and dividends have been growing at a rate of 5% per year. The equity discount rate for comparable companies is 10%.

a) What is the projected dividend for next year?

b) What is the current value of the stock using the Constant Growth Model of the Dividend Discount Model?

Reference no: EM131167600

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