Changes in growth and stock valuation

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Changes in Growth and Stock Valuation

Consider a firm that had been priced using a 12 percent growth rate and a 14 percent required return. The firm recently paid a $1.35 dividend. The firm just announced that because of a new joint venture, it will likely grow at a 12.5 percent rate.

How much should the stock price change (in dollars and percentage)? (Round your answers to 2 decimal places.)

Change in stock price $

Change in stock percent %

Reference no: EM131859441

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