A company is expected to pay a $4 dividend per share over the next year and...

 

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A company is expected to pay a $4 dividend per share over the next year and that dividend is expect to grow at 3% thereafter. Investors require an 8% return on a company like this. The current stock price is $88. As a potential investor, what should you do? A company is expected to pay a $4 dividend per share over the next year and that dividend is expect to grow at 3% thereafter. Investors require an 8% return on a company like this. The current stock price is $88. As a potential investor, what should you do?

Answer rating: 100% (QA)

To determine whether to invest in the company we can use the Gordon Growth Model also known as the D... View the full answer