6. Calculate the price of a dividend paying stock using the following information, assuming the price is equal to the present value of all future dividends one will receive from owning the stock. (Hint: treat the stock as a growing perpetuity) Dividend $4.50 Growth rate 2% Required return 12% *
6. Calculate the price of a dividend paying stock using the following information, assuming the price is equal to the present value of all future dividends one will receive from owning the stock. (Hint: treat the stock as a growing perpetuity) Dividend $4.50 Growth rate 2% Required return 12% *
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 11P
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Calculate this ?
all data is provided

Transcribed Image Text:6. Calculate the price of a
dividend paying stock
using the following
information, assuming the
price is equal to the present
value of all future dividends
one will receive from
owning the stock. (Hint:
treat the stock as a growing
perpetuity)
Dividend
$4.50
Growth rate
2%
Required return
12%
*
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