Question
Miles Hardware has an annual cash dividend policy that raises the dividend each year by 3%. Last years dividend was $1.00 per share. Investors want
Miles Hardware has an annual cash dividend policy that raises the dividend each year by 3%. Last years dividend was $1.00 per share. Investors want a 15% return on this stock. What is the stocks price if
a. the company will be in business for 5 years and not have a liquidating dividend?
b. the company will be in business for 15 years and not have a liquidating dividend?
c. the company will be in business for 25 years and not have a liquidating dividend?
d. the company will be in business for 35 years and not have a liquidating dividend?
e. the company will be in business for 75 years and not have a liquidating dividend?
f. forever?
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