How much will you pay for the stock

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Reference no: EM132128797

Wesen Corp. will pay a dividend of $4.30 next year. The company has stated that it will maintain a constant growth rate of 4.75 percent a year forever.

If you want a return of 16 percent, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Current stock price $

If you want a return of 12 percent, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Current stock price $

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eBook & Resources

WorksheetLearning Objective: 07-01 Assess how stock prices depend on future dividends and dividend growth.

Difficulty: 1 Basic

Reference no: EM132128797

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