Three corners markets paid an annual dividend of $1.37 a share last month. today, the company announced that future dividends will be increasing by 2.8 percent annually. if you require a return of 11.6 percent, how much are you willing to pay to purchase one share of this stock today?

Question

Business

Johanna Conner

28 May, 05:41

Three corners markets paid an annual dividend of $1.37 a share last month. today, the company announced that future dividends will be increasing by 2.8 percent annually. if you require a return of 11.6 percent, how much are you willing to pay to purchase one share of this stock today?

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Answers (1)

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Ana Wang · Answer 1

Given

$1.37 = share month

2.8 % increase

11.6 % returned

Find how much pay to purchase one share of this stock

$1.37 x 0.028 = 0.03836

$1.37+0.03836 = 1.40836

$ 1.40836 x. 116 = 0.16336976

$ 1.40836 + 0.16336976 = $1.57

The answer is $1.57 to purchase one share of this stock today.