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What price should abc sell for today

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Reference no: EM132681902

You are given the following information for ABC Inc.:

(1) The risk free rate is 5%.

(2) The rate of return on the market is 8%.

(3) The expected growth rate in dividends is 4%.

(4) The last dividend paid was $0.80 per share.

(5) Beta is 1.0

a) What price should ABC sell for today?

b) What price should ABC sell for, if the growth rate in dividends increase to 6% and beta increases to 1.5.

Reference no: EM132681902

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