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What is the expected rate of return

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Reference no: EM132741993

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Q1. An investor wishes to know what the value of a common stock is if it pays a dividend of $7.00 today. The company's dividend growth rate is 5.5% and the investor expects the stock to earn 7%. What is the value?

Q2. If a common stock is worth $80 and the dividend growth rate is 5% with a dividend expected to pay $2.00 in a year's time, what is the expected rate of return?

Reference no: EM132741993

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