Future dividends will be increasing at a constant rate

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Reference no: EM131331072

Pete’s, Inc. recently paid $4.00 to their shareholders as the annual dividend. The company also announced that future dividends will be increasing at a constant rate of 4.5 percent. If you require a 12.5 percent rate of return, how much are you willing to pay to purchase one share of Pete’s stock? Show work.

Reference no: EM131331072

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