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Required return on equity investments

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A stock just paid a dividend of $1.50 per share. The board of directors simultaneously announces its intentions to increase all future annual dividends by a constant rate of 3% per year. If an investor believes that management will follow through on its plans for dividend increases, what would the investor be willing to pay today assuming that she has a required return on equity investments of 13%?

Reference no: EM133057431

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