Calculate the price that you would be willing to pay


Problem:

Calculate the price that you would be willing to pay for a 'constant growth' stock that has the following characteristics: (a) Annual Dividend: $1.23, (b) Constant Growth Rate: 5.6%, and (c) Investor's required rate of return: 6.5%.

Note: Solve the given numerical problem and illustrate step by step calculation.

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Finance Basics: Calculate the price that you would be willing to pay
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