FIN 3600 CORPORATE FINANCE CHAPTER 5 IN-CLASS PROBLEM P5-6 NAME DATE COMMON STOCK VALUATION-ZERO GROWTH Alice Stone Company's common stock has paid a $3 dividend for so long that investors are now ned that the stock will continue to pay that annual dividend forever. If the next dividend is due in one year, and investors require an 8% return on the stock, what is its current market price Answer: What will the price be immediately after the next dividend payment? Answer: TURN IN ONE HALF AS PART OF YOUR IN-CLASS WORK/KEEP THE OTHER HALF FOR YOUR REVIEW