What is the maximum price you would be willing to pay

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Reference no: EM131324252

You are considering purchasing stock in a company that is expected to pay a? $2.87 dividend later this year and you require a return of 17.61%.

Assume the dividend will continue to be paid each year thereafter and will grow every year as described below.

What is the maximum price you would be willing to pay if you expect a growth rate of? 2%?

Note that the question provides the next? dividend, not the last dividend. Be sure to adjust the dividend growth model formula accordingly.

Please provide steps in solution.

Reference no: EM131324252

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