Red royal technology stock has an expected return

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1. Red Royal Technology stock has an expected return of 12.5 percent and pays annual dividends that are expected to grow annually by 2.08 percent forever. The firm’s next dividend is expected in 1 year from today. If the firm’s dividend is expected to be 14.84 dollars in 7 years from today, then what is the current price of the stock?

2. What is the expected annual return for a stock that is priced at 93.85 dollars, is expected to pay a dividend of 1.86 dollars every quarter forever, and is expected to pay its next dividend in 3 months? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

Reference no: EM132010435

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