What is the most you should pay per share

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Reference no: EM131021552

1. The dividend for Weaver, Inc., is expected to grow at 24 percent for the next 4 years before leveling off at a 5.5 percent rate indefinitely. If the firm just paid a dividend of $1.04 and you require a return of 14 percent on the stock, what is the most you should pay per share?

2. Bill’s Bakery expects earnings per share of 5 = $5 next year. Current book value is $4 per share. The appropriate discount rate for Bill's Bakery is 12.2 percent. Calculate the share price for Bill's Bakery if earnings grow at 4 percent forever.

Reference no: EM131021552

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