Q4) Magnetic Corporation expects dividends to grow at a rate of 19.64% for the next...
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| Q4) Magnetic Corporation expects dividends to grow at a rate of 19.64% for the next two years. After two years, dividends are expected to grow at a constant rate of 4.16% , indefinitely. Magnetics required rate of return is 13.15% and they paid a $2.32 dividend today. Compute the following for Magnetic Corporations common stock: |
| a) Dividend at end of year 1 : (0.5 points) |
| b) Dividend at end of year 2 : (0.5 points) |
| c) Dividend at end of year 3 : (0.5 points) |
| d) Price of stock at end of year 2 : (1 point) |
| e) Price of stock today : (1 point) |
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