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The Walton Company has issued common shares

Finance

The Walton Company has issued common shares. Using the information below, calculate the price of these shares. Most recent dividend Constant growth rate of the firm Required rate of reurn on these shares 4.00 4% 14%

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Share price=Expected dividend next year/ (Required rate- Growth rate)

= D0*(1+g)/ (r-g)

= 4*(1+4%)/(14%-4%)

= 4*1.04/10%

= 4.16/10%

=$41.60