Find the internal rate of return (IRR) of buying a $400 stock now that's expected to pay
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Find the internal rate of return (IRR) of buying a $400 stock now that's expected to pay annual dividends forever, with the next $3 dividend to be paid in one year (t=1). The dividend is expected to grow forever at 4% per annum . Therefore the second dividend (paid at t=2) is expected to be $3.12 (=(3*(1+0.04)^1). What is the IRR of buying this stock now is:
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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