Thursday, 31 July 2014

Hot Wings, Inc., has an odd dividend policy. The company has just paid a dividend of $9.25 per share

Hot Wings, Inc., has an odd dividend policy. The company has just paid a dividend of $9.25 per share and has announced that it will increase the dividend by $7.25 per share for each of the next four years, and then never pay another dividend.
 
Required:
If you require a return of 14 percent on the company’s stock, how much will you pay for a share today? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
   
 Current share price  $  


Explanation: