The expected dividend payment next year of Extra Bounty Corporation will be $5.00 per share and expected to grow at a constant rate of 3.5% indefinitely. The investors require a rate of return of 8.25% on this stock. How much would you pay for this stock today? ($105.26)
What is the current dividend yield? (4.75%)
In the above problem, if investors require an 11% return, how much will the price of the stock be?