You believe that a company will pay a $ 2 dividend per share next year and following

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You believe that a company will pay a $

2

dividend per share next year and following this year the dividends will have a dividend growth rate of

6 %

annually in perpetuity. You want a

12 %

yield in your investment. How much will you be willing to pay for the price of the stock?

Related Book For answer-question

Essentials of Managerial Finance

ISBN: 978-0324422702

14th edition

Authors: Scott Besley, Eugene F. Brigham

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Posted Date: Apr 20, 2024 12:41 AM

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You believe that a company will pay a $ 2 dividend per share next year and following

Question:

Expert Answer:

To calculate the price of the stock we can use the dividend discount model formula P... View the full answer

Essentials of Managerial Finance

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