Explain what should the stock price be

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Reference no: EM1343944

MMK Cos. normally pays an annual dividend. The last such dividend paid was $1.7, all future dividends are expect to grow at a rate of 8 percent per year, and the firm faces a required rate of return on equity of 21 percent. If the firm just announced that the next dividend will be an extraordinary dividend of $26.5 per share that is not expected to affect any other future dividends.

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Explain what should the stock price be?

Reference no: EM1343944

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