Nelson, Inc., has an odd dividend policy. The company has just paid a dividend of $11 per

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Nelson, Inc., has an odd dividend policy. The company has just paid a dividend of $11 per share and has announced that it will increase the dividend by $3.50 per share for each of the next five years, and then never pay another dividend. If you require a return of 10 percent on the company’s stock, how much will you pay for a share today?

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Corporate Finance Core Principles And Applications

ISBN: 9781260571127

6th Edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan

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