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Global Logistics just announced it is increasing its annual dividend to $1.68 next year and establishing...

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Finance

Global Logistics just announced it is increasing its annualdividend to $1.68 next year and establishing a policy whereby thedividend will increase by 3.25 percent annually thereafter. Howmuch will one share of this stock be worth ten years from now ifthe required rate of return is 13.5 percent?

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3.8 Ratings (385 Votes)
As per Gordon model share price is given by Share price D1 k g where D1 is next years dividend k is the required rate of return 135 and g is the growth rate 325 For calculating the share price 10 from    See Answer
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Transcribed Image Text

Global Logistics just announced it is increasing its annualdividend to $1.68 next year and establishing a policy whereby thedividend will increase by 3.25 percent annually thereafter. Howmuch will one share of this stock be worth ten years from now ifthe required rate of return is 13.5 percent?

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