Widely expected that the dividend will increase

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Reference no: EM131930935

Gentleman Gym just paid its annual dividend of $2 per share, and it is widely expected that the dividend will increase by 5% per year indefinitely.

a. What price should the stock sell at if the discount rate is 12%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Stock price $

b. What price should the stock sell at if the discount rate is 10%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Stock price $

Reference no: EM131930935

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