A stock you are evaluating just paid an annual dividend of $2.70. Dividends have grown at a
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Question:
A stock you are evaluating just paid an annual dividend of $2.70. Dividends have grown at a constant rate of 2.4 percent over the last 15 years and you expect this to continue.
a. If the required rate of return on the stock is 12.8 percent, what is its fair present value?
b. If the required rate of return on the stock is 15.8 percent, what should the fair value be four years from today?
(For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
Related Book For
Contemporary Financial Management
ISBN: 9780324289114
10th Edition
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
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