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Dividend paid

A share of common stock has an expected long-run constant growth rate of 10 percent and is currently priced at $66 per share. If investors require a 15 percent rate of return, then what was the last dividend paid on the stock?

Po = Dn (1 +Gc)
__________
Ke - Gc

$66 = D1 (1 + .10)
_____________
15% - 10%

$66 = D1 (1 + .10)
_____
$5

$3.30 = D1 (1.10)

$3.00 = Do = last dividend paid was $3.00 answer ?????
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What was the last dividend paid on the stock

A share of common stock has an expected long-run constant growth rate of 10 percent and is currently priced at $66 per share. If investors require a 15 percent rate of return, then what was the last dividend paid on the stock?

Po = Dn (1 ...

Solution Summary

Solution shows computation of the last dividend paid on the stock.

$2.19