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Gentry Can company.
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Gentry Can company’s latest annual dividend of $1.25 a share was paid yesterday and maintained its historic 7 percent annual rate of growth. You plan to purchase the stock today because you believe the dividend growth rate will increase to 8 percent for the next three years and the selling price of the stock will be $40 per share at the end of that time. a. How much should you be willing to pay for the GCC stock if you require a 12 percent eturn? b. What is the maximum price you should be willing to pay for the GCC stock if you believe that the 8 percent growth rate can be maintained indefinitely and you require a 12 percent return? c. If the 8 percent rate of growth is achieved, what will the price be at end of year 3, assuming the condition in part b?
Gentry Can company.
Order 100% plagiarism free essay on Gentry Can company
Gentry Can company’s latest annual dividend of $1.25 a share was paid yesterday and maintained its historic 7 percent annual rate of growth. You plan to purchase the stock today because you believe the dividend growth rate will increase to 8 percent for the next three years and the selling price of the stock will be $40 per share at the end of that time. a. How much should you be willing to pay for the GCC stock if you require a 12 percent eturn? b. What is the maximum price you should be willing to pay for the GCC stock if you believe that the 8 percent growth rate can be maintained indefinitely and you require a 12 percent return? c. If the 8 percent rate of growth is achieved, what will the price be at end of year 3, assuming the condition in part b?
Gentry Can company.
Order 100% plagiarism free essay on Gentry Can company
Gentry Can company’s latest annual dividend of $1.25 a share was paid yesterday and maintained its historic 7 percent annual rate of growth. You plan to purchase the stock today because you believe the dividend growth rate will increase to 8 percent for the next three years and the selling price of the stock will be $40 per share at the end of that time. a. How much should you be willing to pay for the GCC stock if you require a 12 percent eturn? b. What is the maximum price you should be willing to pay for the GCC stock if you believe that the 8 percent growth rate can be maintained indefinitely and you require a 12 percent return? c. If the 8 percent rate of growth is achieved, what will the price be at end of year 3, assuming the condition in part b?
Gentry Can company.
Order 100% plagiarism free essay on Gentry Can company