Question

Fey Fashions expects the following dividend pattern over the next seven​ year. The company will then...

Fey Fashions expects the following dividend pattern over the next seven​ year. The company will then have a constant dividend of ​$2.10 forever. What is the​stock's price today if an investor wants to earn

a. 16​%?

b. 23​%?

Year 1   Year 2   Year 3   Year 4   Year 5   Year 6   Year 7
1.00   1.11   1.23   1.37   1.52   1.69   1.88

What is the​ stock's price today if an investor wants to earn 16​%?

What is the​ stock's price today if an investor wants to earn 23%?

Homework Answers

Answer #1

a)

At 16% rate,

b)

At 23% rate,

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