Odd dividend policy-how much will you pay for a share


Hot Wings, Inc., has an odd dividend policy. The company has just paid a dividend of $8.50 per share and has announced that it will increase the dividend by $6.50 per share for each of the next four years, and then never pay another dividend.

Required: If you require a return of 16 percent on the company’s stock, how much will you pay for a share today?

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Financial Management: Odd dividend policy-how much will you pay for a share
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