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Value of the stock according to gordon model

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Reference no: EM133114625

Chris is considering investing in the stock of Gamma Corporation, which is currently trading at $12.40 per share. The stock recently paid a dividend of $2.25; however, due to a poor industry outlook, dividends are expected to grow at a rate of 2.7% forever. Given a required rate of return of 6.4%, what is the value of the stock according to Gordon model?

Reference no: EM133114625

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