Explain how much should you be prepared to pay for the stock

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Q. You believe that the Non-stick Gum Factory will pay a dividend of $2 on its common stock next year. Thereafter, you expect dividends to grow at a rate of 6% a year in perpetuity. If you require a return of 12% on your investment, explain how much should you be prepared to pay for the stock?

Reference no: EM13105526

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