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Red Sun Rising just paid a dividend of $2.49 per share. The company said that it...

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Finance


Red Sun Rising just paid a dividend of $2.49 per share. The companysaid that it will increase the dividend by 25 percent and 20 overthe next two years, respectively. After that, the company isexpected to increase its annual dividend at 3.9 percent. If therequired return is 11.7 percent, what is the stock price today

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Step 1 Computation of market price at the end of year 2 usingGordon Growth MdelP2 D3 Ke gWhereP2 share    See Answer
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Red Sun Rising just paid a dividend of $2.49 per share. The companysaid that it will increase the dividend by 25 percent and 20 overthe next two years, respectively. After that, the company isexpected to increase its annual dividend at 3.9 percent. If therequired return is 11.7 percent, what is the stock price today

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