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You are considering buying common stock in Grow On, Inc. The firm yesterday paid a dividend of $7.10. You have projected that dividends will grow at a rate of 7.0% per year indefinitely. The firm's beta is 2.46, the risk-free rate is 6.2%, and the market return is 14.1%. What is the most you should pay for the stock now? $44.55 $38.11 $27.70 $29.64 $40.78

You are considering buying common stock in Grow On, Inc. The firm yesterday paid a dividend of $7.10. You have projected that dividends will grow at a rate of 7.0% per year indefinitely. The firm's beta is 2.46, the risk-free rate is 6.2%, and the market return is 14.1%. What is the most you should pay for the stock now? $44.55 $38.11 $27.70 $29.64 $40.78

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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You are considering buying common stock in Grow On, Inc. The firm yesterday paid a dividend of $7.10. You have projected that dividends will grow at a rate of 7.0% per year indefinitely. The firm's beta is 2.46, the risk-free rate is 6.2%, and the market return is 14.1%. What is the most you should pay for the stock now? $44.55 $38.11 $27.70 $29.64 $40.78
Transcribed Image Text:You are considering buying common stock in Grow On, Inc. The firm yesterday paid a dividend of $7.10. You have projected that dividends will grow at a rate of 7.0% per year indefinitely. The firm's beta is 2.46, the risk-free rate is 6.2%, and the market return is 14.1%. What is the most you should pay for the stock now? $44.55 $38.11 $27.70 $29.64 $40.78
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