What is the value of a stock that expects to pay a $1.00 dividend next year, and then increase the dividend at a rate of 4% per year, indefinitely? Assume a 9% cost of capital. Show your work.
What is the value of a stock that expects to pay a $1.00 dividend next year, and then increase the dividend at a rate of 4% per year, indefinitely? Assume a 9% cost of capital. Show your work.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 2P
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