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The Stock of the Preston Corporation Is Expected to Pay

question 51

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The stock of the Preston Corporation is expected to pay a dividend of $6 during the coming year.Dividends are expected to grow far into the future at 8%.Investors have recently evaluated future market return variance to be 0.0016 and the covariance of returns for Preston and the market as 0.00352.Assuming a required market return of 14% and a risk-free rate of 6%,at what price should the stock of Preston sell?


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