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After one year, a company will pay $5 in dividends. It commits to paying $5.30 two years from the current date. This growth rate for dividends is expected to continue indefinitely. The U.S. Treasury bond yield is 8% and the equity-risk premium is equal to 2.5%. Compute the required stock return and current price of this stock, using the dividend-discount model.
Certainty
The state of being completely confident or having an absolute conviction about something, with no doubts.
Innovating
The process of creating new methods, ideas, or products that bring about significant improvements or solve problems in unique ways.
Social Media
Online platforms that enable users to create and share content or participate in social networking.
Business Opportunities
Circumstances or situations that present potential for new business growth, expansion, or profitability.
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