Anderson Motors, Inc. has just set the company dividend policy at $0.50 per year. The company plans

Question:

Anderson Motors, Inc. has just set the company dividend policy at $0.50 per year. The company plans on being in business forever. What is the price of this stock if

a. An investor wants a 5% return?

b. An investor wants an 8% return?

c. An investor wants a 10% return?

d. An investor wants a 13% return?

e. An investor wants a 20% return?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...