Constant growth rate-how much will you pay for the stock

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Reference no: EM131342109

Alexander Corp. will pay a dividend of $3.90 next year. The company has stated that it will maintain a constant growth rate of 4.75 percent a year forever.

Requirement 1:

If you want a 16 percent rate of return, how much will you pay for the stock?

Requirement 2:

If you want a 9 percent rate of return, how much will you pay for the stock?

Reference no: EM131342109

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Constant growth rate-how much will you pay for the stock : Alexander Corp. will pay a dividend of $3.90 next year. The company has stated that it will maintain a constant growth rate of 4.75 percent a year forever. If you want a 16 percent rate of return, how much will you pay for the stock?

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