The Slim Waist announced today that they will begin paying annual dividends. The first dividend will be paid next year in the amount of $.35 a share. The following dividends will be $.40, $.55, and $.70 a share annually for the following three years, respectively. After that, dividends are projected to increase by 2.5 percent per year. How much are you willing to pay to buy one share of this stock if your desired rate of return is 12 percent?

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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The Slim Waist announced today that they will begin paying annual dividends. The first dividend will be paid next year in the amount of $.35 a share. The following dividends will be $.40, $.55, and $.70 a share annually for the following three years, respectively. After that, dividends are projected to increase by 2.5 percent per year. How much are you willing to pay to buy one share of this stock if your desired rate of return is 12 percent?

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