A firm has a dividend policy to pay a constant annual dividend of $0.40 per share to its common shareholders perpetually. If these shareholders required rate of return of 20%, what is the share price?   Question 14 options:   1)  $4   2)  $2   3)  $0.20   4)  $0.40

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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A firm has a dividend policy to pay a constant annual dividend of $0.40 per share to its common shareholders perpetually. If these shareholders required rate of return of 20%, what is the share price?
 

Question 14 options:

 

1) 

$4
 

2) 

$2
 

3) 

$0.20
 

4) 

$0.40
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