Willing to pay for common stock

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Reference no: EM133646516

Question

You are considering the purchase of Crown Bakery, Inc. common stock that just paid a dividend of $6.70 per share. You expect the dividend to grow at a rate of 2.28 percent per year, indefinitely. You estimate that a required rate of return of 12.53 percent, will be adequate compensation for this investment. What is the most that you would be willing to pay for the common stock if you were to purchase it today?

Reference no: EM133646516

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