Level of dividend every year for the time being

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1. The Clark Group pays an annual dividend of $5.80 per share. The economy is tough but Clark promises to continue maintaining this level of dividend every year for the time being. How much are you willing to pay for one share of this stock is you want to earn a 14.5% annual return?

2. Miller Cooper just paid a $4.25 annual dividend with the stated intention of increasing its dividend by 3% annually. You would like to purchase stock in this firm but realize that you will not have the funds to do so for another 4 years. If you require a 15% rate of return, how much will you be willing to pay per share for the stock when you can afford to make this investment?

Reference no: EM131073579

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