Question: Problem 7-12 Stock Valuation [LO 1] Cape Corp. will pay a dividend of $4.40 next year. The company has stated that it will maintain a
Problem 7-12 Stock Valuation [LO 1] Cape Corp. will pay a dividend of $4.40 next year. The company has stated that it will maintain a constant growth rate of 5 percent a year forever. a. If you want a return of 17 percent, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. If you want a return of 10 percent, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Stock price Stock price b
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