What should the dividend be

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1. You are considering acquiring a common stock that you would like to hold for one year. You expect to receive both 1.86 in dividends and 37.50 from the sale of the stock at the end of the year.

What is the maximum price you would pay for the stock today if you want to earn a return of 11%

Maximum Price_____________

2. Moderate growth company paid a dividend last year of 2.30. The expected ROE for next year is 13%. An appropriate required return for the stock is 11%. If the firm has a plowback of 59%, what should the dividend be? Dividend_________ (round to 3 decimal places)

Reference no: EM131986717

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