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October 23, 2014

Homework Help: Finance

Posted by Teresa on Thursday, March 13, 2008 at 7:03pm.

Company Q has just paid a dividend of $1.40 per share. Its dividend is expected to grow at 5% per year perpetually. If the required return is 10%, what is the value of a share in Company Q?

What I know:
Current Div=1.40
Required rate of return=10%
Retention Ratio=90% ?
Growth rate=5%
I think this formula??
DIV/r-g

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