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Stock evaluation and stock investment return

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Reference no: EM133116034

a) Solve the questions below on stock evaluation and stock investment return:

i) You are evaluating Home Depot (HD) stock. This stock is expected to experience supernormal growth in dividends of 7 percent over the next 7 years. Following this period, dividends are expected to grow at a constant rate of 3 percent. The stock paid a dividend of $7 last year, and the required rate of return on the stock is 11 percent. What is the stock's fair present value? Show your workings.

Reference no: EM133116034

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