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Three corners markets paid an annual dividend of $1.37 a share last month. today, the company announced that future dividends will be increasing by 2.8 percent annually. if you require a return of 11.6 percent, how much are you willing to pay to purchase one share of this stock today?

Respuesta :

Given 
   $1.37 = share month
   2.8 % increase 
   11.6 % returned
Find how much pay to purchase one share of this stock 

$1.37 x 0.028 = 0.03836
$1.37+0.03836 = 1.40836
$1.40836 x .116 = 0.16336976
$1.40836+0.16336976 = $1.57 

The answer is $1.57 to purchase one share of this stock today.

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