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Common stock valuation. 10 points?

You intend to purchase Marigo common stock at $50 per share, hold it for 1 year and then sell it after a dividend of $6 is paid. How much will the stock price have to appreciate for you to satisfy your required rate of return of 15%?

1 Answer

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  • 7 years ago

    Return at year's end with 15% rate of return = 50*0.15= = $7.50

    required appreciation = $7.50 - $6.0 = $1.50

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