What is a fair price for the stock today

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Reference no: EM133002122

A share of stock has a dividend that is expected to grow at a constant perpetual rate.
During the next year (t=0 to t=1), the dividend yield is expected to be 6.79%.

The capital gains yield for the next year is expected to be 16.35%.

Dividends are paid at year's end.

Problem 1: If the dividend to be paid at the end of the year (at t=1) is expected to be $7.31, what is a fair price for the stock today (t=0)?

Reference no: EM133002122

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