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Gordon Growth model for stocks and TVM You are evaluating Kramerica to determine if its...

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Finance

Gordon Growth model for stocks and TVM You are evaluating Kramerica to determine if its stock is a good buy. Kramerica's dividend one year ago was $0.20, and it has a beta 0.625. The market risk premium is currently 8% and T-bills pay 6%. Kramerica enjoys constant dividend growth, and just paid a dividend of $0.22 per share. What is the most you should pay for Kramerica?

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