what would you pay today for a stock that is expected to make $1.50 dividend in one year if the expected dividend growth rate is 3% and you require a 16% return on your investment?

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter27: Investment, The Capital Market, And The Wealth Of Nations
Section: Chapter Questions
Problem 6CQ
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what would you pay today for a stock that is expected to make $150 dividend in one year if the expected dividend growth rate is
3% and you require a 16% retum on your investment?
Transcribed Image Text:what would you pay today for a stock that is expected to make $150 dividend in one year if the expected dividend growth rate is 3% and you require a 16% retum on your investment?
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