You are considering buying Pfizer stock. You are trying to calculate a reasonable price based on dividends.
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Question:
You are considering buying Pfizer stock. You are trying to calculate a reasonable price based on dividends. To simplify the problem, it is January 1, 2022 now. You do not know about dividends in 2022. Please, take 5-year dividend payment history from here:https://investors.pfizer.com/Investors/Stock-Info/dividend-split-history/default.aspx You are interested in regular cash dividend only.
1) If your required rate of return for the stocks of similar risk is 7%, what price would you be willing to pay?
2) Check the actual stock price for January 1, 2022. What does the comparison of your calculated price with the actual price tell you? Would you buy the stock?
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