Evaluate the stock that paid a dividend of $4.25 last year and is currently selling for $36 per share. If your company decides to buy the stock, the stock will be held for 5 years and then sold. The growth rate on the stock is a constant at 3% per year and your company's required return on the stock would be 11%. What's the maximum price per share that your company should pay for stock? Show work.© BrainMass Inc. brainmass.com March 5, 2021, 1:37 am ad1c9bdddf
This solution depicts the steps to estimate the fair value of stock.