Increase dividend at a constant rate

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Kay Williams is interested in purchasing the common stock of Reckers, Inc., which is currently priced at $35.40. The company is expected to pay a dividend of $2.58 next year and to increase its dividend at a constant rate of 6.50 percent. If the required rate of return is 14%, should Kay purchase the stock at the current price?

With explanation please

Reference no: EM131550570

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