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What is a fair market price for a company common stock

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Reference no: EM132948841

Problem 1: A company common stock paid a dividend of $5.00 yesterday. The dividend is expected to grow at 2% per year. If investors require a return of 15% to hold a company's common shares, what is a fair market price for a company common stock?

Multiple Choice

Option 1: $32.28
Option 2: $39.23
Option 3: $36.64
Option 4: $38.23

Reference no: EM132948841

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