Stock Market Assignment
February 19th, 2020
Four years ago, XYZ company paid a dividend of $0.80 per share. Today XYZ paid a dividend of $1.66 per share. It is expected that the company will pay dividends growing at this same rate for the next 5 years. Thereafter, the growth rate will level off at 8% per year. The current stock price is $30. If the required return on this stock remains at 18%, should you buy the stock?
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