A stock just paid a dividend of $3.10 and is expected to grow its dividends indefinitely at a constant annual growth rate of 1.1%. Using a required rate of return (or discount rate) of  13%, calculate the current fair value for this stock.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 2P
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A stock just paid a dividend of $3.10 and is expected to grow its dividends indefinitely at a constant annual growth rate of 1.1%. Using a required rate of return (or discount rate) of  13%, calculate the current fair value for this stock.

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