Feeback Corporation stock currently sells for $81 per share. The market requires

Question

Feeback Corporation stock currently sells for $81 per share. The market requires a return of 11.1 percent on the firm%u2019s stock. If the company maintains a constant 3 percent growth rate in dividends, what was the most recent dividend per share paid on the stock?

Feeback Corporation stock currently sells for $81 per share. The market requires a return of 11.1 percent on the firm%u2019s stock. If the company maintains a constant 3 percent growth rate in dividends, what was the most recent dividend per share paid on the stock?

Explanation / Answer

growth rate in dividends = 3%

x*((100+3)/100)/(.081) = 81
x*(103/100)/(0.081) = 81
x=$6.37

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.