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    NEW QUESTION: 1
    Given that a firm will exist for two years and issue dividends of $20 per share at the end of each year, and the required rate of return on shares is 10%, what is the value of its common stock according to the Dividend Discount Model?
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    B. $28.32
    C. $34.71
    D. $35.93
    E. Not enough information
    Answer: C
    Explanation:
    Explanation/Reference:
    Explanation:
    The dividend discount model (Dividend Discount Model) assumes that the value of a share of common stock is the present value of all future dividends. In this question, the value of a share of common stock is equal to 20/(1 +0.10) + 20 /[(1 + 0.10)

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