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What is the value of stock using dividend dividend model

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Nick Inc. just paid a $2 dividend on its common stock and expects to continue growing dividends at an average rate of 5% each year, from now to infinity. If the require rate of return for this stock is 9%. What is the value of this stock using the dividend dividend model?

Should she investor buy this stock if it's current price is $55.40? Why / why not?

Reference no: EM133059784

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