Question: (1 point) (Exercise 6.36) A common stock pays annual dividends at the end of each year. The earnings per share in the year just ended

(1 point) (Exercise 6.36) A common stock pays annual dividends at

(1 point) (Exercise 6.36) A common stock pays annual dividends at the end of each year. The earnings per share in the year just ended were $50. Earnings are assumed to grow 7% per year in the future. The percentage of earnings paid out as a dividend will be 0% for the next 7 years and 60% thereafter. Find the theoretical price of the stock to yield an investor 8% effective ANSWER $

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