Your husband would like to try his luck and buy some stock shares, so he can have some additional dividend income in the near future. He wants to start with the stock of one company in the food field. This company paid a dividend equal to $5 per share just a couple of days ago. Your husband recently read an announcement on the company's website about their future dividend policy: the company's per-share dividend will be increasing each year by $6, again and again for the next 5 years. According to the same announcement, the company will then stop paying dividends. The investors who buy this company's shares are offered an expected annual return of 12 percent.

If your husband buys one share of this company's stock today, how much should he expect to pay? (Do not round your intermediate calculations. Round your final answer to 2 decimal places, e.g., 52.62.)

Answer rating: 100% (QA)

Step 13 The expected annual return of 12 percent means that the stock price should increase by 12 ea... View the full answer