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just paid $2.55 to its shareholders as the annual dividend. Simultaneously, the company announced that future dividends will be increasing by 5.5 percent. If you require a rate of return of 9.7 percent, how much are you willing to pay today to purchase one share of the company's stock?

Respuesta :

amirmeeka

Answer:

$64.04.

Explanation:

P0 = [$2.55 (1 + 0.055) / (0.097 - 0.055)]

P0 = 2.69 / 0.042

P0 = $64.04.

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