Market expectation of the growth rate

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Reference no: EM131210563

MBI, a large computer company, will pay a year-end dividend of $1 per share.

A). If the stock is selling at $50 per share, and the expected return is 14%, what must be the market's expectation of the growth rate of MBI dividends? Please Show Work.

B). If growth is revised down to 4% per year, what is the new (current) price?

Reference no: EM131210563

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