Spears, Inc., has an odd dividend policy. The company has just paid a dividend of $7 per share and has announced that it will increase the dividend by $4 per share for each of the next four years, and then never pay another dividend. If you require an 11% return on the company's stock, how much will you pay for a share today?© BrainMass Inc. brainmass.com October 1, 2020, 9:11 pm ad1c9bdddf
We have to find the present value of the dividends:
Dividend Present value factor Present ...
Non-constant dividends for Spears, Inc is determined with an odd dividend policy.