A stock is trading at
$80 per share. The stock is expected to have a year-end dividend of
$4 per share (D1 = $4), and it is expected to grow at
some constant rate gL throughout time. The stock's
required rate of return is 14% (assume the market is in equilibrium
with the required return equal to the expected return). What is
your forecast of gL? Round the answer to three decimal
places.
%
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