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    The Economics of Money Banking Study Set 3
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    Exam 7: The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis
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    Using the Gordon Growth Formula, If D₁ Is $2
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Using the Gordon Growth Formula, If D₁ Is $2

Question 50

Question 50

Multiple Choice

Using the Gordon growth formula, if D₁ is $2.00, kₑ is 12 percent or 0.12, and g is 10 percent or 0.10, then the current stock price is ________.


A) $20
B) $50
C) $100
D) $150

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