How much should you be willing to pay for the stock

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Reference no: EM131615896

New Empire Inc.’s common shares are listed on the TSX. The company recently paid a cash dividend of 80 cents per share to its shareholders. The company anticipates that it will be able to increase the dividend by 20% for each of the next two years, then by 10% for each of the two years after that, following which the dividend will not change. Holders of Empire’s stock require a return of 18%. As an investor, how much should you be willing to pay for the stock?

Reference no: EM131615896

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