Determine the current share price - shareholder, Cost Accounting

Most corporations pay quarterly dividends on their common stock rather than annual dividends. Barring any unusual circumstances during the year, the board raises, lowers, or maintains the current dividend once a year and then pays this dividend out in equal quarterly installments to its shareholders.  

a. Suppose a company currently pays a $3.20 annual dividend on its common stock in a single annual installment, and management plans on raising this dividend by 6 percent per year, indefinitely. If the required return on this stock is 12 percent, what is the current share price?   

Posted Date: 3/23/2013 5:30:38 AM | Location : United States

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