Question

8) Healthy Foods just paid its annual dividend of $1.62 a share. The firm recently 8) announced that all future dividends will be increased by 2.1 percent annually. What is one share of this stock worth to you if you require a rate of return of 15.7 percent

Answer 1

$12.16

Step-by-step explanation:

Calculation to determine What is one share of this stock worth to you if you require a rate of return of 15.7 percent

P0 = ($1.62 × 1.021)/(.157-.021)

P0 =1.65402/.136

P0 = $12.16

Therefore what one share of this stock will be worth to you if you require a rate of return of 15.7 percent will be $12.16