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Question
Suppose that the current dividend for a stock is Dtoday, the expected dividend growth rate is r, and the interest rate is i. If we ignore risk, which of the following represents the dividend-discount model formula for the fundamental price of a stock?A. Dtoday/(i + g)
B. (i + g)/Dtoday
C. Dtoday(1 + g)/(i - g)
D. Dtoday/(i - g)
Answer
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