Problem 2: Given the following information, calculate the price of the common stock using constant...
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Problem 2: Given the following information, calculate the price of the common stock using constant dividend growth model. Risk-free rate ( Rf ) = 4%; Market Rate of Return ( Rm ) =12% Beta of the Stock = 1.25 Expected end of the year Dividend = $2.00/per share Constant dividend growth rate = 6% per year [Hint: First calculate the required rate of return for the stock using CAPM]
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