Share based on the gordon growth model

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Reference no: EM131902331

Huskie Motor’s just paid an annual dividend of $1.00 per share. Management has promised shareholders to increase dividends a constant rate of 5%. If the required return is 12%, what should be the current price per share based on the Gordon Growth Model? Suppose the current price in the market is $14.25. Should you buy the stock? Why or why not?

Reference no: EM131902331

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