Dividend is fixed-what is the value of the stock

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You own a stock that you are considering selling. The current dividend is $1.10/share. Your required return for this stock is 7%. The current market price of the stock is $23.50. Consider each of the following situations separately.

If the dividend is fixed, what is the value of the stock? Should you sell it?

If the dividend grows at 2% indefinitely, what is the value of the stock? Should you sell it?

If the dividend grows at 5% for the first two years and then 2% indefinitely, what is the value of the stock? Should you sell it?

Reference no: EM131575588

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