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Constant Growth Stock Valuation
Investors require a 16% rate of return on Brooks Sisters' stock (rs = 16%). a.What would the value of Brooks's stock be if the previous dividend was D0 = $4 and if investors expect dividends to grow at a constant compound annual rate of
(1) - 6%?
(2) 0%?
(3) 4%?
(4) 11%?
Round your answers to the nearest cent.
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