The common stock of NCP paid $1.32 in dividends last year. Dividends are expected to grow at

Question:

The common stock of NCP paid $1.32 in dividends last year. Dividends are expected to grow at an 8 percent annual rate for an indefinite number of years.

a. If your required rate of return is 10.5 percent, what is the value of the stock for you?

b. Should you make the investment?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...