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27 July, 12:35

Spacefood Products will pay a dividend of $2.40 per share this year. It is expected that this dividend will grow by 5% per year each year in the future. What will be the current value of a single share of Spacefood's stock if the firm's equity cost of capital is 12%?

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  1. 27 July, 16:10
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    The value of a single share is $34.29



    Explanation:

    P = D 1 / r-g

    P = $2.40 / 12% - 5% = $34.29
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