A stock is expected to pay a dividend of $3.50 next year, and dividends are expected to
grow at the rate of 5% indefinitely. If the cost of capital is 15%, at what price should
this stock sell? How much value is the expected growth adding to the price?

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The Answer of A stock is expected to pay a dividend of $3.50 next year, and dividends are expected to
grow at the rate of 5% indefinitely. If the cost of capital is 15%, at what price should
this stock sell? How much value is the expected growth adding to the price?

A Stock Is Expected to Pay a Dividend of $3