Cannady’s, Inc. has announced that its next annualdividend has been set at $2.75 per share....

Cannady’s, Inc. has announced that its next annual dividend has been set at $2.75 per share. The company also announced that future dividends will be increasing at a constant rate of 4.5 percent. If you require a 10.5 percent rate of return, how much are you willing to pay to purchase one share of Canady’s stock?

Expert Solution

Equity Valuation:

D₁= 2.75, g = 4.5%, i = 10.5%

Price willing to pay is $45.83.

jeff jeffy answered 2 years ago

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