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n on equity of 12 per aordinary dividend of lends, what should th d your final answer

n on equity of 12 per aordinary dividend of lends, what should th d your final answer

FINANCIAL ACCOUNTING
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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JBK, Inc., normally pays an annual dividend. The last such dividend paid was $2.60, all future dividends are expected to grow at 5 percent, and the firm faces a required rate of return on equity of 12 percent. If the firm Just announced that the next dividend will be an extraordinary dividend of $17.10 per share that is not expected to affect any other future dividends, what should the stock price be? (Do not round Intermediate calculations and round your final answer to 2 decimal places.) Stock price
Transcribed Image Text:JBK, Inc., normally pays an annual dividend. The last such dividend paid was $2.60, all future dividends are expected to grow at 5 percent, and the firm faces a required rate of return on equity of 12 percent. If the firm Just announced that the next dividend will be an extraordinary dividend of $17.10 per share that is not expected to affect any other future dividends, what should the stock price be? (Do not round Intermediate calculations and round your final answer to 2 decimal places.) Stock price
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