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Four years ago, XYZ company paid a dividend of $1.60 per share. Today it paid $3.32 per share. It is expected that the company will
Four years ago, XYZ company paid a dividend of $1.60 per share. Today it paid $3.32 per share. It is expected that the company will pay dividends growing at this same rate for the next 3 years. After that, the growth rate will remain at 8% per year for many years to come. The current stock price is $50 per share. If the required rate of return of this stock is 18%, should you buy the stock?
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