Odd dividend policy-how much will you pay for a share today

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Reference no: EM131510944

Hot Wings, Inc., has an odd dividend policy. The company has just paid a dividend of $9.50 per share and has announced that it will increase the dividend by $7.50 per share for each of the next four years, and then never pay another dividend.

Required:

If you require a return of 15 percent on the company’s stock, how much will you pay for a share today?

Reference no: EM131510944

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