Problemhot wings inc has an odd dividend policy the company, Ask an Expert

Accounting

Problem:

Hot Wings, Inc., has an odd dividend policy. The company has just paid a dividend of $8 per share and has announced that it will increase the dividend by $6 per share for each of the next four years, and then never pay another dividend.

Required:

Question: If you require a 14 percent return on the company's stock, how much will you pay for a share today?

Note: Provide support for your underlying principle.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91168921

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