Leslie's Unique Clothing Stores offers a common stock that pays an annual dividend of $3.00 a share. The company has promised to maintain a constant dividend. How much are you willing to pay for one share of this stock if you want to earn a 13% return on your equity investments?

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Quizplus · Accepted Answer

The correct answer is B) $23.08.To calculate the price of the stock, we can use the formula:Price = Dividend / Required ReturnIn this case, the dividend is $3.00 and the required return is 13%, or 0.13.Therefore, the price of the stock is:Price = $3.00 / 0.13 = $23.08

Leslie's Unique Clothing Stores Offers a Common Stock That Pays