If a stock's dividend is expected to grow at a constant rate of 6 percent in the future and it has just paid a dividend of $2.50 a share,and you have an alternative investment of equal risk that will earn a 8 percent rate of return,what would you be willing to pay per share for this stock today?
A) $2.86
B) $33.13
C) $132.50
D) $200.00
Correct Answer:
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