Question
You are interested in purchasing the common stock of Inch, Inc., which is currently priced at $ 40. The company is expected to pay a
You are interested in purchasing the common stock of Inch, Inc., which is currently priced at $ 40. The company is expected to pay a dividend of $3 next year and to grow at a constant rate of 8 percent.
a.What should the market value of the stock be if the required rate of return is 15.75 percent? (1mark)
b.Is this a good buy? Why or why not? (1mark)
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Intermediate Accounting
Authors: James D. Stice, Earl K. Stice, Fred Skousen
16th Edition
324376375, 0324375743I, 978-0324376371, 9780324375749, 978-0324312140
