Let's say AMZN has a current price of $157.88 and it will start to pay dividends...

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Let's say AMZN has a current price of $157.88 and it will start to pay dividends in 10 years. You require a 12% rate of return on your investment. Imagine that AMZN dividend payments will increase at a rate of 5% forever. What is the amount of dividend in year 10 that makes you want to purchase the stock at its current price? Now, get the current market cap and calculate the current number of shares outstanding. Multiply your D10 that you just calculated by the number of shares outstanding. What is the total payment that AMZN will make in year 10? Give your answer in billions. Let's say AMZN has a current price of $157.88 and it will start to pay dividends in 10 years. You require a 12% rate of return on your investment. Imagine that AMZN dividend payments will increase at a rate of 5% forever. What is the amount of dividend in year 10 that makes you want to purchase the stock at its current price? Now, get the current market cap and calculate the current number of shares outstanding. Multiply your D10 that you just calculated by the number of shares outstanding. What is the total payment that AMZN will make in year 10? Give your answer in billions.

Answer rating: 100% (QA)

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