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Question 13 Suppose a company currently pays a $2.40 annual dividend on its common stock in a single annual installment, and management plans on raising

Question 13

  1. Suppose a company currently pays a $2.40 annual dividend on its common stock

in a single annual installment, and management plans on raising this dividend by 6 percent per year indefinitely. If the required return on this stock is 12 percent, what is the current share price?

  1. Now suppose the company actually pays its annual dividend in equal quarterly installments. So what will be quarterly dividend payment?

solve by using formulas

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