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Accounting

Problem:

Hot Wings, Inc., has an odd dividend policy. The company has just paid a dividend of $9.00 per share and has announced that it will increase the dividend by $7.00 per share for each of the next four years, and then never pay another dividend.

Required:

Question: If you require a return of 12 percent on the company's stock, how much will you pay for a share today?

Note: Provide support for rationale.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91172923

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