ABC, Inc. just paid a dividend of $2. ABC expects dividends to grow at 5%. The...

 

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ABC, Inc. just paid a dividend of $2. ABC expects dividends to grow at 5%. The return on stocks like ABC, Inc. is typically around 10%. 1. What is the most you would pay for a share of ABC stock? 2. What do you expect the price of the share to be in 4 years' time? (4 marks) (4 marks) ABC, Inc. just paid a dividend of $2. ABC expects dividends to grow at 5%. The return on stocks like ABC, Inc. is typically around 10%. 1. What is the most you would pay for a share of ABC stock? 2. What do you expect the price of the share to be in 4 years' time? (4 marks) (4 marks)

Answer rating: 100% (QA)

To calculate the most one would pay for a share of ABC stock we can use th... View the full answer