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    Non-Constant Dividends in Spears Inc.

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    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
    https://brainmass.com/business/dividends-stock-repurchase-and-policy/constant-dividends-spears-167805

    Solution Preview

    We have to find the present value of the dividends:

    Dividend Present value factor Present ...

    Solution Summary

    Non-constant dividends for Spears, Inc is determined with an odd dividend policy.

    $2.19

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