You believe that next year the Superannuation Company will pay a dividend of $2 on its common
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You believe that next year the Superannuation Company will pay a dividend of $2 on its common stock. Thereafter you expect dividends to grow at a rate of 4 percent a year in perpetuity. If you require a return of 12 percent on your investment, how much should you be prepared to pay for the stock?
DividendA dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Related Book For 
Principles of Corporate Finance
ISBN: 978-0072869460
7th edition
Authors: Richard A. Brealey, Stewart C. Myers
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