Rate of return to purchase its common stock

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Reference no: EM131184981

Since it has been in business, FoolsGold Jewelry has never paid a dividend. The company will not pay a dividend at the end of this year. However, two years from today- at the end of year 2- FoolsGold expects to pay a dividend equal to $0.50 per share, which it plans to increase to 6 percent each year thereafter for the remainder of the company's life. If investors require a 14 percent rate of return to purchase its common stock, what should be the market value of FoolsGold stock today?

Reference no: EM131184981

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