Inman, Inc. is a growing company and does not expect to initiate dividends for 10 years, at
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Question:
Inman, Inc. is a growing company and does not expect to initiate dividends for 10 years, at which time it will pay an annual dividend of $5.00 per share (i.e. D10= $5.00). At that time, Inman expects its dividends to grow at 6% forever. You are interested in purchasing Inman stock if you can earn an 11% required rate o return.
If you buy Inman stock today and hold it for 10 years, what would you expect the price to be at that time (P10)?
Answer:
What is the most you would pay today (P0) for one share of Inman stock?
Answer:
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