Gerald's Travel Service just paid $1.79 to its shareholders as the annual dividend. Simultaneously, to company announced that future dividends will be increased by 3.2 %. If you require a 10.5% rate of return, how much are you willing to pay to purchase one share of this stock?
The price will be the present value of all dividends, since the growth rate in ...
The solution explains how to calculate the price of stock.