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What Should the Price of a Share of Common Stock

Question 59

Multiple Choice

What should the price of a share of common stock be according to dividend valuation model if the dividends are expected to grow 2 percent per year, the next dividend is $2.00 and the investors' discount rate is 7 percent?


A) 10
B) 20
C) 30
D) 40

Correct Answer:

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