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Sagot :
The stock price is $27.774.
The stock price can be determined using the Gordon constant dividend growth model. According to the model:
Stock price = DI / (r - g)
Where:
- D1 = dividend in the next period = 1 x ( 1.054) = 1.054
- r = required rate of return
- g = growth rate
1.054 / (9.2 - 5.4)
1.054 / 3.8
1.054 / 0.038
= $27.74
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