About the odd dividend policy

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Reference no: EM131999996

Maloney, Inc., has an odd dividend policy. The company has just paid an annual dividend of $4 per share and has announced that it will increase the dividend by $6 per year for each of the next five years, and then never pay another dividend. If you require an annual return of 10 percent on the company’s stock, how much will you pay for a share today? Note: the $4 dividend has already been paid, so you should ignore it in the present value calculations.

Reference no: EM131999996

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