Investor be willing to pay for common stock in firm

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Reference no: EM13895365

What would an investor be willing to pay for common stock in a firm that has no growth opportunities but pays dividends of $6.00 per year, starting today? The next dividend will be paid in exactly 1 year. The required rate of return is a stated annual rate of 12.5% compounded quarterly. If the investor buys now, they will receive today’s dividend. Please show your work.

Reference no: EM13895365

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