Maloney, Inc., has an odd dividend policy. The company has just paid a dividend

Question

Maloney, Inc., has an odd dividend policy. The company has just paid a dividend of $8 per share and has announced that it will increase the dividend by $6 per share for each of the next five years, and then never pay another dividend. If you require a return of 11 percent on the company%u2019s stock, how much will you pay for a share today? (Round your answer to 2 decimal places. (e.g., 32.16))

Maloney, Inc., has an odd dividend policy. The company has just paid a dividend of $8 per share and has announced that it will increase the dividend by $6 per share for each of the next five years, and then never pay another dividend. If you require a return of 11 percent on the company%u2019s stock, how much will you pay for a share today? (Round your answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

Share price = 14/1.11 + 20/(1.11)^2 + 26/(1.11)^3+ 32/(1.11)^4+ 38/(1.11)^5 = $91.49

Current share price

$   

Current share price

$   

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