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Common Stock Value: Constant Growth. Over the past 6 years, ABC Company has paid dividends as shown below. ABCs 2021 dividend is expected to be
- Common Stock Value: Constant Growth. Over the past 6 years, ABC Company has paid dividends as shown below. ABCs 2021 dividend is expected to be $2.84.
| Year | Dividend per share |
| 2020 | 2.68 |
| 2019 | 2.53 |
| 2018 | 2.38 |
| 2017 | 2.25 |
| 2016 | 2.12 |
| 2015 | 2.00 |
- If you can earn 12% on similar-risk investments, what is the most you would be willing to pay per share?
- If you can earn only 9% on similar-risk investments, what is the most you would be willing to pay per share?
- Compare and contrast your findings in parts a and b, and discuss the impact of changing risk on share value.
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International Financial Management
Authors: Cheol Eun, Bruce Resnick
5thEdition
0073382345, 9780073382340
