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The common stock of Textile Mills pays an annual dividend of $1.65 a share. The company...

The common stock of Textile Mills pays an annual dividend of $1.65 a share. The company has promised to maintain a constant dividend even though economic times are tough. How much are you willing to pay for one share of this stock if you want to earn a 12 percent annual return?

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Expert Solution

assume i am willing to pay x ....so

0.12x=1.65

or x=13.75

milcah answered 2 years ago
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