Calculate a reasonable price that should be willing to pay

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Whole Foods, Inc. paid a quarterly dividend of $.47 recently. Treasury bills are yielding 4% and the average stock is returning about 11%. Whole Foods is a stable company. The return on its stock responds to changes in the political and economic environment only about 70% as vigorously as that of the average stock. Analyst expect the firm to grow at an annual rate of 3.5% into the indefinite future. Calculate a reasonable price that investors should be willing to pay for Whole Foods stock.

Reference no: EM13287081

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