Kelligrews Inc. has an odd dividend policy. The company has just paid a dividend of $6 per

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Kelligrews Inc. has an odd dividend policy. The company has just paid a dividend of $6 per share and has announced that it will increase the dividend by $4 per share for each of the next 5 years, and then never pay another dividend. If you require an 11 percent return on the company’s stock, how much will you pay for a share today?

Dividend
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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Related Book For  answer-question

Fundamentals of Corporate Finance

ISBN: 978-0071051606

8th Canadian Edition

Authors: Stephen A. Ross, Randolph W. Westerfield

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