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Calculate the value of a stock

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Reference no: EM133115769

a. (a) Calculate the value of a stock that is expected to pay a constant dividend of RM1.05 per year if the required return is 11%.

b. A common stock just paid a dividend of RM1.20. The dividend is expected to grow at 8% for 5 years, then it will grow at 4% in perpetuity. Calculate the stock value. The discount rate is 12%. (Hint: dividend states in 3 decimals and price states in 2 decimals)

c. Suppose a company just paid a dividend for RM0.30 and expects to increase dividends by 3% per year. The required return is 8%. Calculate the value of the stock.

Reference no: EM133115769

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