Question: Miles Hardware has an annual cash dividend policy that raises

Miles Hardware has an annual cash dividend policy that raises the dividend each year by 3%. Last year’s dividend was $1.00 per share. Investors want a 15% return on this stock. What is the stock’s price if
a. The company will be in business for 5 years and not have a liquidating dividend?
b. The company will be in business for 15 years and not have a liquidating dividend?
c. The company will be in business for 25 years and not have a liquidating dividend?
d. The company will be in business for 35 years and not have a liquidating dividend?
e. The company will be in business for 75 years and not have a liquidating dividend?
f. Forever?


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  • CreatedMay 08, 2014
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