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Calculate the required return for shares

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Assuming a risk-free rate of 3% and market risk premium of 7%, calculate the required return for both shares. If the future growth in dividends is expected to continuously average 3% for A and 2% for B, what value would you place on each share (use the dividend growth model). What concerns do you have, if any, in regards to your valuations? NOTE: The last dividend paid for A was $2.60 and $1.15 by B.

Reference no: EM132578182

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