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Frances Restaurant made two announcements concerning their common stock today. First, the company announced the next annual dividend will be $5.00 a share and will
Frances Restaurant made two announcements concerning their common stock today. First, the company announced the next annual dividend will be $5.00 a share and will be paid in one year. Secondly, all dividends after that will increase by 4.0 percent annually. What is the maximum amount you should pay to purchase a share of this stock if your goal is to earn an 8 percent rate of return? (10 points)
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