Question

# Mannix Corporation stock currently sells for \$51 per share. The market requires a return of 8.2...

 Mannix Corporation stock currently sells for \$51 per share. The market requires a return of 8.2 percent on the firm’s stock. If the company maintains a constant 2.1 percent growth rate in dividends, what was the most recent dividend per share paid on the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
 Dividend paid per share

Current Price = \$51.00
Required Return = 8.20%
Growth Rate = 2.10%

Current Price = Expected Dividend in Year 1 / (Required Return - Growth Rate)
\$51.00 = Expected Dividend in Year 1 / (0.0820 - 0.0210)
\$51.00 = Expected Dividend in Year 1 / 0.061
Expected Dividend in Year 1 = \$3.111

Expected Dividend in Year 1 = Recent Dividend * (1 + Growth Rate)
\$3.111 = Recent Dividend * (1 + 0.0210)
\$3.111 = Recent Dividend * 1.0210
Recent Dividend = \$3.05

So, recent dividend per share is \$3.05

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