Determine the value of the stock for lo company

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Problem 1: The Lo Company earned $2.60 per share and paid a dividend of $1.30 per share in the year just ended. Earnings and dividends per share are expected to grow at a rate of 5 percent per year in the future. Determine the value of the stock if the required rate of return is 12 percent.

Option 1: $18.57
Option 2: $13.65
Option 3: $19.50
Option 4: $11.33

Reference no: EM132968043

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