How much be prepared to pay for the stock


You believe that the Non-stick Gum factory will pay a dividend of $2 on its common stock next year. Thereafter, you expect dividends to grow at the rate of 6% a year in perpetuity. If you require a return of 12% on your investment, how much should you be prepared to pay for the stock?

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Finance Basics: How much be prepared to pay for the stock
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