Question

Asked Nov 23, 2019

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Circuit City Stores (CC) recently paid a $.24 dividend. The dividend is expected to grow at a 23.80 percent rate. At the current stock price of $8.76, what is the return shareholders are expecting?

Step 1

Given that the recent dividend is $.24, current stock price is $8.76 and the dividend is expected to grow at a 23.80%

Suppose D1 be the dividend in year 1, P0 be the current share price and g be the growth rate.

Step 2

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