Question: Ms Manners Catering MMC has paid a constant 1 50 per
Ms. Manners Catering (MMC) has paid a constant $1.50 per share dividend to its common stockholders for the past 25 years. Beginning with the next dividend, MMC expects to increase the dividend at a constant rate equal to 2 percent per year into perpetuity. Investors require a 12 percent rate of return to purchase MMC’s common stock. What is the market value of MMC’s common stock?
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