A stock you are evaluating just paid an annual dividend of $2.50. Dividends have grown at a constant rate of 1.5 percent over the last 15 years and you expect this to continue, if the required rate of return on the stock is 12 percent, what is its fair present value and if the required rate of return on the stock is 15 percent, what should the fair value be four years from today?

A stock you are evaluating just paid an annual dividend of $2.50. Dividends have grown at a constant rate of 1.5 percent over the last 15 years and you expect this to continue, if the required rate of return on the stock is 12 percent, what is its fair present value and if the required rate of return on the stock is 15 percent, what should the fair value be four years from today?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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