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Calculate caroline stock price

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Reference no: EM132462765

Problem - Caroline Inc. currently pays a dividend of $2.70, and the company's dividend is expected to grow by 4% per year. The company's has the following costs of capital:

Cost of equity capital = 9%

Cost of debt capital = 6.5%

Weighted average cost of capital = 8.25%.

Required - Use the above information to calculate Caroline's stock price using the dividend discount model.

Reference no: EM132462765

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