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+---- Thread: Principles of Finance sample question from TESC - which formula to use? (/Thread-Principles-of-Finance-sample-question-from-TESC-which-formula-to-use)
Principles of Finance sample question from TESC - which formula to use? - OfficerA - 07-20-2014
Trying to get started studying for the DSST for Principles of Finance. Came across this, and could not figure out what the answer was, or for that matter, what formula I would use here (tried the Gordon Growth Model and promptly got lost:
"A firm has common stock outstanding that paid a $2 dividend last year. This stock has a 6% expected growth rate. If you have a 10% required rate of return, what is the most you should pay for this stock?"
Thanks.