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20 May, 19:34

Stoneheart Group is expected to pay a dividend of $2.93 next year. The company's dividend growth rate is expected to be 4.3 percent indefinitely and investors require a return of 10.5 percent on the company's stock. What is the stock price

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  1. 20 May, 21:53
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    Answer: $47.26

    Explanation:

    Stock price = Dividend / (Required return - Dividend growth rate)

    P0 = $2.93 / (0.105 - 0.043)

    = $2.93 / (0.062)

    =$47.26
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