5.30 The Webster Co. has just paid a dividend of $5.25 per share. The company will increase...

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5.30 The Webster Co. has just paid a dividend of $5.25 per share. The company will increase its dividend by 15 percent next year and will then reduce its dividend growth by 3 percent each year until it reaches the industry average of 5 percent growth, after which the company will keep a constant growth, forever. The required rate of return for the Webster Co. is 14 percent. What will a share of stock sell for?

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Corporate Finance

ISBN: 9780071229036

6th International Edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe

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