Firm pays the dividend in one year to justify current price

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Reference no: EM131340751

Assume Evco, Inc. has a current stock price of $45.91 and will pay a $1.75 dividend in one year; its equity cost of capital is 14%.

What price must you expect Evco stock to sell for immediately after the firm pays the dividend in one year to justify its current price?

Reference no: EM131340751

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