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ind the market-implied total required return on equity of buying a $375 stock now that's...

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Finance

ind the market-implied total required return on equity of buying a $375 stock now that's expected to pay annual dividends forever, with the next $17 dividend to be paid in one year (t=1). The dividend is expected to grow forever at 1% per annum . Therefore the second dividend (paid at t=2) is expected to be $17.17 (=(17*(1+0.01)^1). Assume that the stock can be accurately valued with the DDM. The stock's market-implied total required return on equity is:

Question 6Select one:

a.

1% pa

b.

5.533333% pa

c.

5.588667% pa

d.

7.533333% pa

e.

17% pa

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