A company follows a dividend policy that raises dividends annually at a rate of 4% (and expects this rate to go forever). The company just paid an annual dividend of $2.11. The required rate of return is 15%. What is today's stock price? For your answer round to the nearest 2 decimals. Do not use the $ sign in your answer. For example, if the answer is $3.237 enter your answer as 3.24; Do not enter it as $3.237, $3.2, 3.2, or 3.237
A company follows a dividend policy that raises dividends annually at a rate of 4% (and expects this rate to go forever). The company just paid an annual dividend of $2.11. The required rate of return is 15%. What is today's stock price? For your answer round to the nearest 2 decimals. Do not use the $ sign in your answer. For example, if the answer is $3.237 enter your answer as 3.24; Do not enter it as $3.237, $3.2, 3.2, or 3.237
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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Question
![A company follows a dividend policy that raises dividends annually at a rate of 4%
(and expects this rate to go forever). The company just paid an annual dividend of
$2.11. The required rate of return is 15%.
What is today's stock price?
For your answer round to the nearest 2 decimals. Do not use the $ sign in your
answer. For example, if the answer is $3.237 enter your answer as 3.24; Do not
enter it as $3.237, $3.2, 3.2, or 3.237](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdd50640d-76e6-4354-a97e-5a710b1cfac5%2Ff30644ea-f91b-4acc-8bc9-4b7109c15511%2Fyrgmz6g_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A company follows a dividend policy that raises dividends annually at a rate of 4%
(and expects this rate to go forever). The company just paid an annual dividend of
$2.11. The required rate of return is 15%.
What is today's stock price?
For your answer round to the nearest 2 decimals. Do not use the $ sign in your
answer. For example, if the answer is $3.237 enter your answer as 3.24; Do not
enter it as $3.237, $3.2, 3.2, or 3.237
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