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Business, 25.03.2020 20:24 joey333

Assume that investors expect a return of rE= 10%for holding stocks. Consider two stocks. The first pays currently a dividend ofD1= 10,which is expected to grow at5%,the second payscurrentlyD2= 100,which is expected to grow at6%.According to the Gordon model which of the two stocks is expected to generate a higher rate of return?

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Assume that investors expect a return of rE= 10%for holding stocks. Consider two stocks. The first p...
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