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August 28, 2014

Homework Help: managerial finance

Posted by help on Friday, March 14, 2008 at 10:49pm.

The growth rate in dividends for IBM for the next five years is expected to be 19 percent. Suppose IBM meets this growth rate in dividends for the next five years and then the dividend growth rate falls to 5 percent indefinately. Assume investors require an 11 percent return on IBM stock. Is the stock priced correctly? What factors could affect your answer?

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