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FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Premier, Incorporated, has an odd dividend policy. The company has just paid a dividend
of $5 per share and has announced that it will increase the dividend by $6 per share for
each of the next five years, and then never pay another dividend. If you require a return
of 12 percent on the company's stock, how much will you pay for a share today? (Do not
round intermediate calculations and round your answer to 2 decimal places, e.g.,
32.16.)
Current share price
Transcribed Image Text:Premier, Incorporated, has an odd dividend policy. The company has just paid a dividend of $5 per share and has announced that it will increase the dividend by $6 per share for each of the next five years, and then never pay another dividend. If you require a return of 12 percent on the company's stock, how much will you pay for a share today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current share price
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