Determine the constant dividend growth rate

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Maspeth Robotics shares are currently selling for € 24 and have paid a dividend of € 1 per share for the most recent year. The following additional information is given: The risk-free rate is 4 percent; The shares have an estimated beta of 1.2; and The equity risk premium is estimated at 5 percent. Based on the above information, determine the constant dividend growth rate that would be required to justify the market price of € 24.

Reference no: EM131886391

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