Pay today for a share of fancy threads common stock

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Reference no: EM13950856

The owner of Fancy Threads, a national high-end women’s boutique is considering opening a boutique on Grand River Avenue. The company has experienced phenomenal sales growth, and you are considering buying some of their stock. The company’s most recent dividend was $1.10, and these dividends are expected to increase by 18% for the next 2 years and then level off to a constant 5% growth rate thereafter. If you want a 12% return on your investment, how much would you pay today for a share of Fancy Threads common stock? A. approx. $25.70 B. approx. $20.70 C. approx. $15.70 D. approx. $18.70 E. approx. $30.70 Show work please!

Reference no: EM13950856

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