Presently,Stock A pays a dividend of $2.00 a share,and you expect the dividend to grow rapidly for the next four years at 20 percent.Thus the dividend payments will be
After this initial period of super-growth,the rate of increase in the dividend should decline to 8 percent.If you want to earn 12 percent on investments in common stock,what is the maximum you should pay for this stock?

Question

Presently,Stock A pays a dividend of $2.00 a share,and you expect the dividend to grow rapidly for the next four years at 20 percent.Thus the dividend payments will be
  After this initial period of super-growth,the rate of increase in the dividend should decline to 8 percent.If you want to earn 12 percent on investments in common stock,what is the maximum you should pay for this stock?

Quizplus · Accepted Answer

The Answer of Presently,Stock A pays a dividend of $2.00 a share,and you expect the dividend to grow rapidly for the next four years at 20 percent.Thus the dividend payments will be
  After this initial period of super-growth,the rate of increase in the dividend should decline to 8 percent.If you want to earn 12 percent on investments in common stock,what is the maximum you should pay for this stock?

Presently,Stock a Pays a Dividend of $2