Question
You are considering the purchase of a share of Ranch's common stock. The company will pay a dividend of $2.50 per share at the end
You are considering the purchase of a share of Ranch's common stock. The company will pay a dividend of $2.50 per share at the end of the year. The future dividend will increase by 1.05% per year.
a. If your required return on this stock is 12%, what is the most you would be willing to pay for it now?
b. How much would you like to pay for the same stock if your required return rate is 18%?
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Intermediate Financial Management
Authors: Eugene F Brigham, Phillip R Daves
14th Edition
0357516664, 978-0357516669
