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You are considering purchasing stock of the Uuge Corporation. Your research leads you to believe that the company will pay dividends as follows: next year the company will not pay a dividend, the year following, the company will pay $1.50/share dividend, the year following that, the company will pay a $2.00/share dividend and beginning in year 4, the company will increase dividends by 3%/year over each preceding year. Since there is substantial uncertainty regarding the dividends to be paid, you believe that a 23% rate of return is appropriate for this investment. Based on this information, what is the maximum per share price you would pay for this stock? You may use the template below to formulate your answer:

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Financial Management, Finance

Category:- Financial Management
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