How much should you be prepared to pay for the stock

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Reference no: EM131998032

Favorite Candy’s Stock is expected to earn $4.30 per share this year. Its P/E ratio is 21. What price is the stock price? (Round your answer to 2 decimal places.)

Current Price

You believe that the Non-Stick Gum Factory will pay a dividend of $4 on its common stock next year. Thereafter, you expect dividends to grow at a rate of 3% a year in perpetuity. If you require a return of 15% on your investment, how much should you be prepared to pay for the stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Stock Price

Reference no: EM131998032

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