The firm just announced that because of a new joint venture


Consider a firm that had been priced using a 12 percent growth rate and a 14 percent required return. The firm recently paid a $2.05 dividend. The firm just announced that because of a new joint venture, it will likely grow at a 12.5 percent rate. How much should the stock price change (in dollars and percentage)?

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Financial Management: The firm just announced that because of a new joint venture
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