The XYZ Corporation pays a dividend of $1 for each share and its required rate of return is 8%. Answer the following questions:

a). Assuming zero growth in dividends, what is the value of each share?
b). Now assume a 4% annual growth rate in the dividend paid. What is the value of each share?
c). Assume the growth rate is still 4%, but the required rate of return drops to 6%. What is the new value of each share?

Answer rating: 100% (QA)

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