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A Firm Has Been Losing Sales Due to Technological Obsolescence

Question 26

Multiple Choice

A firm has been losing sales due to technological obsolescence. It projects growth for the future to be −3 percent. Its recent dividend was $2.50. What is the value of this stock when the required return is 7 percent?


A) $28.17
B) $24.25
C) $17.42
D) $15.53

Correct Answer:

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