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?
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 16P
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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
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