Dividends were constant and your holding period

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Reference no: EM132051004

What is the most you would pay for a stock that just paid a $1.50 dividend that is expected to grow annually at 4% if you want a 10% return?

P=D/r-g

P= 1.50(1.04)/.10-.04

P=1.56/.06 = 26

What is the most you would pay for the stock described above if the dividends were constant and your holding period were 35 years?

PLEASE SHOW ALL WORK AND DO NOT USE EXCEL

Reference no: EM132051004

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