You are thinking about purchasing common shares of a company. The company recently paid a cash dividend of $1.12 per common share. Based on past dividends, the company increases its annual dividend, on average, by 3.6% per year. If you demand a return of 14.5% of stocks of this type, what is the maximum price you'd pay for the stock?

Answer rating: 100% (QA)

We can use the dividend discount model to calculate the maximum price you should pay for ... View the full answer