How much would you be willing to pay for this stock today


ABC Inc. made two announcements concerning their common stock today: (i) the next dividend will be $1 (ii) all dividends after that will increase by 5% annually. How much would you be willing to pay for this stock today, if your goal is to earn a rate of return of 11%? $21.67 $18.83 $20.00 $16.67 $23.33.

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Financial Management: How much would you be willing to pay for this stock today
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