Question
Company XYZ has just paid a dividend of $1.50 per share. Because of its growth potential, its dividend is forecast to grow at a rate
Company XYZ has just paid a dividend of $1.50 per share. Because of its growth potential, its dividend is forecast to grow at a rate of 4 percent per year indefinitely. If the company's appropriate cost of capital (given its risk) is 13 percent, what was XYZ'sshare price immediately after it paid its $1.50 dividend, i.e the stock price right after the ex-dividend date?
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Corporate Finance Core Principles And Applications
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
6th Edition
1260571122, 978-1260571127
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