The Bradshaw Company's most recent dividend was $6.75. The historical dividend payment by the company shows a constant growth rate of 5 percent per year
What is the maximum you would be willing to pay for a share of its common stock if your required rate of return is 8 percent?
D1 = $6.75 × (1 + 0.05 ) = $7.0875
P = D1 / (r - g) = $7.0875/(0.08 - 0.05 ) = $236.25
You might also like to view...
Identify five of Kotler and Kotler's general strategies for growth
What will be an ideal response?
During the acquaintance phase of leadership making, subordinates tend to focus ______.
A. less on their own self-interests B. mostly on their own self-interests C. less on the group's interests D. on both their own and the group's interests
Explain the difference between job simplification and job expansion.
What will be an ideal response?
To bring about stability or organizational change by way of tightening a loosely coupled system requires ______.
A. authoritarianism B. persistence C. an outside consultant D. none of these