Question
Suppose that a company pays annual dividends that are expected to grow at a constant rate of 5% per year forever. The company just paid
Suppose that a company pays annual dividends that are expected to grow at a constant rate of 5% per year forever. The company just paid a dividend of $2. If the market requires an annual return of 13% on this stock, what is the appropriate market price per share?
- A.$11.67
- B.$15.38
- C.$26.25
- D.$16.15
- E.$25
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Essentials Of Investments
Authors: Zvi Bodie, Alex Kane, Alan Marcus
11th Edition
1260288390, 978-1260288391
