Miller Brothers Hardware paid an annual dividend of $1.15 per share last month. Today, the company announced

Question:

Miller Brothers Hardware paid an annual dividend of $1.15 per share last month. Today, the company announced that future dividends will be increasing by 2.6 per cent annually. If you require a 12 per cent rate of return, how much are you willing to pay to purchase one share of this stock today?

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...