Maintain constant growt rate-how much will you pay for stock

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Reference no: EM131011002

Alexander Corp. will pay a dividend of $3.10 next year. The company has stated that it will maintain a constant growth rate of 4.75 percent a year forever.

Requirement 1: If you want a return of 16 percent, how much will you pay for the stock? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Current stock price $

Requirement 2: If you want a return of 10 percent, how much will you pay for the stock? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Current stock price $

Reference no: EM131011002

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