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9 July, 07:26

nine years ago a stock paid a $1.35 dividend since then it has split 3-for-1 two times. the current dividend is 0.15 if you have required rate of return of 15% what is the most you can pay for this stock

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  1. 9 July, 09:47
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    Answer: Price is $1

    Explanation:

    we can use the perpetuity formula to calculate the present value of a share, the present value of share represents the maximum amount that an investor would be willing to pay for a share

    Dividends = 0.15 cents

    required rate of return = 15%

    Present value = 0.15 cents/0.15 = 1

    Price = $1
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Home » Business » nine years ago a stock paid a $1.35 dividend since then it has split 3-for-1 two times. the current dividend is 0.15 if you have required rate of return of 15% what is the most you can pay for this stock
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