If an all-equity firm is expected to earn and pay out a 400


If an all-equity firm is expected to earn and pay out a $4.00 dividend forever (in perpetuity), what is the value of the firm's stock given a cost of equity of 9.60 percent?

  • $22.09
  • $41.67
  • $44.67
  • $44.17

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Finance Basics: If an all-equity firm is expected to earn and pay out a 400
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