Rudolph & Santa successfully sell sleighs throughout the year. The income they receive covers all sleigh production
Question:
Rudolph & Santa successfully sell sleighs throughout the year. The income they receive covers all sleigh production costs, taxes, etc. and leaves enough cash to distribute among the stockholders. Based on the dividend and other income that the investors receive from Rudolph & Santa, the return each year to the investors is equal to 12 percent. A $11.65 per-share dividend was paid by Rudolph & Santa just one day ago. Mr. Santa, the company's manager, has recently announced the company's plan to reduce its annual dividend payment by 4 percent. It is the general belief that this new dividend policy will continue forever.
How much should it cost you to buy each share of Rudolph & Santa's stock in today's market?
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill