You are considering buying common stock in Grow On, Inc. You have projected that the next dividend the company will pay will equal $3.90 and that dividends will grow at a rate of 6.0% per year thereafter. If you would want an annual return of 25.0% to invest in this stock, what is the most you should pay for the stock now?

$20.52

Explanation:

Given that

Estimated dividends for next period = $3.90

Required rate of return = 25%

Growth rate = 6%

The computation of Price of stock is given below:-

Price of stock = Estimated dividends for next period ÷ (Required rate of return - Growth rate)

= $3.90 ÷ (0.25 - 0.06)

= $3.90 ÷ 0.19

= $20.52

Therefore for computing the price of stock we simply applied the above formula.

(i know i'm late but the answer's "things about yourself" because you want to list things you're capable of, why you want to open up the business, the amount of money you're putting into it,etc.) i'm guessing you take online school small business, the answers to the quizzes are all over quizlet. just look up your question and type quizlet after it and it'll pop up.