Problem 7.19 – Determining Stock Price for Antiques R Us

Essentials of Corporate Finance

Ross, Westerfield, and Jordan

10th Edition and 11th Edition

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What is the current share price of Antiques R Us stock, given a recent dividend payment of $12.40 and a reduction in payout of 4 percent per year, with a required return of 9.5 percent on the stock? (Your numbers will vary). Determine the share price if the firm expects to reduce its payout by a fixed percentage per year.

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