4. Stock ValuationPhased Solutions Inc. has paid the following dividends per share from 2011 to 2020:2011$0.072012$0.082013$0.93201420152016$1.10$1.28$1.462017$1.592018$1.80 $1.9320192020$2.11If you plan to hold this stock for 10 years, believe Phased Solutions will continue this dividend patternforever, and you want to earn 17% on your investment, what would you be willing to pay per share ofPhased Solutions stock as of January 1, 2021?

Answered: Image /qna-images/answer/6f8abe1e-be92-474f-a0fd-6f72a567bdd2.jpg

Answered: 4. Stock Valuation Phased Solutions…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The common stock of Barr Labs Inc., trades for $122per share. Investors expect the company to pay a(n)$1.33 dividend next year, and they expect that dividend to grow at a constant rate forever. If investors require a(n) 15.5% return on this stock, what is the dividend growth rate that they are anticipating? _______________________________________________________________________ The anticipated dividend growth rate is ________%. (Round to two decimal places.)
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