Robert Gillman, an equity research analyst at Gillman Advisors, believes in efficient markets. He has...
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Robert Gillman, an equity research analyst at Gillman Advisors, believes in efficient markets. He has been following the mining industry for the past 10 years and needs to determine the constant growth rate that he should use while valuing Pan Asia Mining Company.
Robert has the following information available:
| Pan Asia Mining Companys stock (Ticker: PAMC) is trading at $16.25. | |
| The companys stock is expected to pay a year-end dividend of $0.78 that is expected to grow at a certain rate. | |
| The stocks expected rate of return is 7.80%. |
Based on the information just given, what will be Roberts forecast of PAMCs growth rate?
4.50%
3.00%
7.75%
0.02%
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