What would you pay for a stock that just paid a $10 dividend if the expected...

What would you pay for a stock that just paid a $10 dividend if the expected dividend growth rate is 10% and you require a 15% return on your investment?

Expert Solution

Current price=D1/(Required return-Growth rate)

=(10*1.1)/(0.15-0.1)

which is equal to

=$220

jeff jeffy answered 2 years ago

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