Problem 8.16 – Calculation of Stock Price based on Nonconstant Dividend Policy, Dividends increase by Fixed Dollar Amount
Fundamentals of Corporate Finance
Ross, Westerfield, and Jordan
13th Edition
Determine the price you are willing to pay for a share of stock today, given a company’s nonconstant dividend policy. The dividend starts at a specific amount and increases by a fixed dollar amount for a certain number of years, after which no further dividends will be paid. The required return on the stock is provided.
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