asked 60.0k views
4 votes
lauren corporation will pay a dividend of $4.00 next year. the company has stated that it will maintain a constant growth rate of 5 percent a year forever. if you want a return of 17 percent, how much will you pay for the stock? note: do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. if you want a return of 11 percent, how much will you pay for the stock?

1 Answer

5 votes
If you want a return of 11 percent, you should be willing to pay $66.67 for the stock.
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