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Return on an average stock

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Reference no: EM131757760

You are considering the purchase of a stock that just paid a dividend of $2. Its dividends are expected to grow at 9% in perpetuity. The stock has a beta of 1.4, the risk free rate is 3% and the return on an average stock is 12%. What should you pay for a share of this stock?

Reference no: EM131757760

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