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    Willing to Pay

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    How much are you willing to pay for one share of Jumbo Trout stock if the company just paid a $0.70 annual dividend, the dividends increase by 2.5 percent annually, and you require a 10 percent rate of return?

    How do I do this question? Any help you can give is appreciated, and thank you in advance!

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    Solution Summary

    This detailed exercise illustrates how to determine the price to pay for a share of company stock given the amount that the company paid in its annual dividend, the annual percentage increase (decrease) of the dividend, and the required rate of return.