A colleague has confided they are moving in a different direction with their investments. He is considering investing in a Big Tech type stock. "Big Tech" is expected to pay an annual dividend of $4.46 forever. He require a 4.39% return on your investment. How much should he be willing to pay for this stock today?

 

A random stock is expected to maintain a constant dividend growth rate of 4.9 percent indefinitely. If the stock has a dividend yield of 6.2 percent, what is the required return on that stock?

Answer rating: 100% (QA)

Solution The first question requires us to calculate the present value of the expected future div... View the full answer