Representative of the foreseeable future

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Malfoy Corporation paid a $3.00 dividend per share this year. Its total earnings per share were $6.00. Malfoy’s book equity is $60 million. There are 1 million shares outstanding and the discount rate for Malfoy stock is 12%.(a) What is the growth rate (g) of Malfoy? (b) What is the price of a share of Malfoy stock if you assume that the numbers above are representative of the foreseeable future?

Reference no: EM13976554

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