Evaluate the price of stock using dividend discount model

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Compute the price of stock using dividend discount model.

Draper Company's common stock paid a dividend LAST year of $3.70. You believe that the long-term growth in the dividends of the firm will be 8 percent per year. If your required return for Draper is 14 percent, how much are you willing to pay for the stock?

Reference no: EM1316163

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