Ziggs Corporation will pay a $4.55 per share dividend next year. The company ple

Question

Ziggs Corporation will pay a $4.55 per share dividend next year. The company pledges to increase its dividend by 6.50 percent per year, indefinitely.

If you require a 9 percent return on your investment, how much will you pay for the company%u2019s stock today? (Do not include the dollar sign ($). Round your answer to 2 decimal places (e.g., 32.16).)

Ziggs Corporation will pay a $4.55 per share dividend next year. The company pledges to increase its dividend by 6.50 percent per year, indefinitely.

Explanation / Answer

Hi.

Please find the answer as follows:

PO = 4.55/(.09 - .065) = 182

Answer is 182.

Thanks.

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