Dividends are declining at an annual rate

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Reference no: EM13949072

1. The Retarded Company’s dividends are declining at an annual rate of 6 percent. The company just paid a dividend of $4 per share. You require a 16 percent rate of return. How much will you pay for this stock?

2. The last dividend on Riverhawk Corporation's common stock was $5.00, and the expected constant growth rate is 10 percent. If you require a rate of return of 20 percent, what is the highest price you should be willing to pay for this stock?

Reference no: EM13949072

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