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Next year you expect the Bluth Company to pay a dividend of $3.50. You also expect the dividend to grow at 4% a year
Next year you expect the Bluth Company to pay a dividend of $3.50. You also expect the dividend to grow at 4% a year indefinitely, and you would require a 12% return to hold the stock. What is the highest price you would be willing to pay? Price B - Next year you expect Sitwell Industries to pay a dividend of $5.00. You also expect the dividend to grow at 12% for the 3 years after that and then at 5% for every year after that. If you need to earn an 8% return to hold the stock, what is the highest price you would be willing to pay? Price Year 1 2 3 4 Price Dividend C- Dunder Mifflin Inc just paid a dividend of $1.20. You expect that the dividend will grow at 20% a year for each of the next three years, and then you expect the growth rate to decrease by 1 percentage point each year until it reaches 4%, at which point the growth rate will stabilize. If you need to earn at least a 10% return to hold the stock, what is the highest price you would be willing to pay?
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