Nofal Corporation will pay a $5.6 per share dividend next year. The company pledges to increase...

Question

Question

Nofal Corporation will pay a $5.6 per share dividend next year. The company pledges to increase its dividend by 4 percent per year, indefinitely.

If you require a return of 12 percent on your investment, how much will you pay for the company’s stock today?

Answer 1

Answer #1

Answer: 0? (R-9) Po= Di= Current market price Expected dividend R= g= Return Growth on investment rate & Po = $5.6 (0.12 -0.0

Answer 2

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