An investor requires a return of 12 percent. A stock sells for $25, it pays a dividend
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An investor requires a return of 12 percent. A stock sells for $25, it pays a dividend of $1, and the dividends compound annually at 7 percent. Will this investor find the stock attractive? What is the maximum amount that this investor should pay for the stock?
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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V 11 07 2140 12 07 If the price is 25 the stock is overvalu...View the full answer
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