In one year, a firm will pay a common stock dividend of $6.35. The dividends have been growing at 6% per year. Based on analysts' forecasts, you predict that you will be able to sell your stock for $48 per share after one year. If you require a rate of return of 13 percent on your stock, how much would you be willing to pay now for a share of the stock? O $51.27 O $45.85 O $42.11 O $58.54 O $48.10
In one year, a firm will pay a common stock dividend of $6.35. The dividends have been growing at 6% per year. Based on analysts' forecasts, you predict that you will be able to sell your stock for $48 per share after one year. If you require a rate of return of 13 percent on your stock, how much would you be willing to pay now for a share of the stock? O $51.27 O $45.85 O $42.11 O $58.54 O $48.10
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 16P
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