Southern Utilities just issued some new preferred stock. The issue will pay a $19 annual dividend in perpetuity beginning 9 years from now. What is one share of this stock worth today if the market requires a 7 percent return on this investment?
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111.
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Big Falls Tours just paid a dividend of $1.55 per share. The dividends are expected to grow at 30 percent for the next 8 years and then level off to a 6 percent growth rate indefinitely. What is the price of this stock today given a required return of 15 percent?
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112.
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Harvey County Choppers, Inc. is experiencing rapid growth. The company expects dividends to grow at 25 percent per year for the next 7 years before leveling off to 7 percent into perpetuity. The required return on the stock is 12 percent. What is the current stock price if the annual dividend share that was just paid was $1.05?
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