Determine the expected rate of return for the stock

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Reference no: EM131918475

Adam’s Inc.’s outstanding common stock is currently selling in the market for $28. Dividends of $1.80 per share were paid last year, and the company expects annual growth of 6%. (a) What is the value of the stock to you, given an 11% required rate of return? (b) Determine the expected rate of return for the stock. (c) Should you purchase this stock? Why?

Reference no: EM131918475

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