Calculate required rate of return on constant growth stock

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Calculate the maximum price that you would pay for a ‘constant growth’ stock that has the following characteristics: (a) Dividend: $1.50 (will pay), (b) Growth Rate: 5%, and (c) Required Rate of Return: 10%.

Calculate the required rate of return on the following ‘constant growth’ stock: (a) Price: $45.23, (b) Dividend: $2.45, and (c) Constant Growth Rate: 4%.

Calculate the price that you would pay for a non-constant growth stock with the following characteristics: (a) Non-Constant Growth (3 Years): 24%, (b) Dividend: $2.30, (c) Constant Growth: 4%, and (d) Required Rate of Return: 12%.

Calculate the price that you would pay for a non-constant growth stock with the following characteristics: (a) Non-Constant Growth (3 Years): -10.00%, (b) Dividend: $3.21, (c) Constant Growth: 6%, and (d) Required Rate of Return: 15%.

Reference no: EM13927713

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