Evaluate the stock that paid a dividend


Question: Evaluate the stock that paid a dividend of $4.25 last year and is currently selling for $36 per share. If your company decides to buy the stock, the stock will be held for 5 years and then sold. The growth rate on the stock is a constant at 3% per year and your company's required return on the stock would be 11%. What's the maximum price per share that your company should pay for stock? Show work.

Solution Preview :

Prepared by a verified Expert
Finance Basics: Evaluate the stock that paid a dividend
Reference No:- TGS02038548

Now Priced at $20 (50% Discount)

Recommended (96%)

Rated (4.8/5)