Carbohydrates Anonymous (CA) operates a chain of weight-loss centers for carb lovers. Its services have been in
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Carbohydrates Anonymous (CA) operates a chain of weight-loss centers for carb lovers. Its services have been in great demand in recent years and its profits have soared. CA recently paid an annual dividend of $1.35 per share. Investors expect that the company will increase the dividend by 20 % in each of the next three years, and after that they anticipate that dividends will grow by about 5 % per year. If the market requires an 11 % return on CA stock, what should the stock sell for today?
DividendA 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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The dividend stream for the next few years looks lik...View the full answer
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Related Book For 
Introduction to Corporate Finance What Companies Do
ISBN: 978-1111222284
3rd edition
Authors: John Graham, Scott Smart
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