This morning, the company paid $1.30 per share and will maintain this dividend indefinitely. What is this stock worth to you if you require a 10% rate of return? Pick the answer closest to the correct value. a. $14.23 b. $10.86 c. $12.98 d. $11.64 e. $11.11
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Step 1
In this case, the dividend is $1.30 per share, so: Dividend yield = $1.30 / Stock price We don't know the stock price yet, so let's call it P. We also know that we require a 10% rate of return, which is our expected return on investment. This means that we want Show more…
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