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13 Chapter 6/7 Assume Evco, Inc. has a current stock price of $45.42 and will...

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Accounting

13 Chapter 6/7

Assume Evco, Inc. has a current stock price of $45.42 and will pay a $1.75 dividend in one year; its equity cost of capital is 16%. What price must you expect Evco stock to sell for immediately after the firm pays the dividend in one year to justify its current price?

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