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A firms common stock currently sells at $42 per share. The company anticipate a constant growth rate of
10 percent and an end-of-year dividend of $ 2.75.
- If you require a 17 percent return, should you purchase the stock?
- If you require a 16 percent return and predict the market price of the stock to be 50 per share at
end of the year, should you sell them out at that time?
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