Compute what is an investor valuation of a stock

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Problem 1: According to the Gordon growth model, what is an investor's valuation of a stock whose current dividend is $1.00 per year if dividends are expected to grow at a constant rate of 10 percent over a long period of time and the investor's required return is 11 percent?

A. $100
B. $10
C. $11
D. $110
E. $5.24

Reference no: EM132717188

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