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Relationship between the required return and stock price

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Reference no: EM131846424

Wesen Corp. will pay a dividend of $3.14 next year.

The company has stated that it will maintain a constant growth rate of 4.5 percent a year forever. If you want a return of 12 percent, how much will you pay for the stock? What if you want a return of 8 percent? What does this tell you about the relationship between the required return and the stock price?

 

Reference no: EM131846424

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