Maloney, Inc., has an odd dividend policy. The company has just paid a dividend of $3.50...
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Maloney, Inc., has an odd dividend policy. The company has just paid a dividend of $3.50 per share and has announced that it will increase the dividend by $4.50 per share for each of the next five years, and then never pay another dividend. If you require a return of 11 percent on the company's stock, how much will you pay for a share today? Current dividend Dividend growth $ Required return Year 1 2 3 4 5 $ Share price SA SA Complete the following analysis. Do not hard code values in your calculations. Dividend 3.50 4.50 11% Maloney, Inc., has an odd dividend policy. The company has just paid a dividend of $3.50 per share and has announced that it will increase the dividend by $4.50 per share for each of the next five years, and then never pay another dividend. If you require a return of 11 percent on the company's stock, how much will you pay for a share today? Current dividend Dividend growth $ Required return Year 1 2 3 4 5 $ Share price SA SA Complete the following analysis. Do not hard code values in your calculations. Dividend 3.50 4.50 11%
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Answer rating: 100% (QA)
To find the current share price of Maloney Inc we can use the dividend discount model DDM In this ca... View the full answer
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9781259654756
10th Canadian Edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan, Gordon Roberts, J. Ari Pandes, Thomas Holloway
Posted Date:
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