Five Star Corporation will pay a dividend of $4.35 per share next year. The company pledges to increase its dividend by 5.5 percent per year, indefinitely. If you require a return of 9 percent on your investment, how much will you pay for the company's stock today? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Current stock price r

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
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Five Star Corporation will pay a dividend of $4.35 per share next year. The company pledges to increase its dividend by 5.5
percent per year, indefinitely. If you require a return of 9 percent on your investment, how much will you pay for the company's
stock today?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
Current stock price
Transcribed Image Text:Five Star Corporation will pay a dividend of $4.35 per share next year. The company pledges to increase its dividend by 5.5 percent per year, indefinitely. If you require a return of 9 percent on your investment, how much will you pay for the company's stock today? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Current stock price
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