1. If you require an 14.10 percent return on your investment, how much will you
ID: 2775182 • Letter: 1
Question
1.
If you require an 14.10 percent return on your investment, how much will you pay for the company's stock today?
2.
Suppose you know a company's stock currently sells for $70 per share and the required return on the stock is 9 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield.
If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share?
Metroplex Corporation will pay a $3.90 per share dividend next year. The company pledges to increase its dividend by 7.00 percent per year indefinitely.Explanation / Answer
1. If you require an 14.10 percent return on your investment, how much will you
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