Posted: May 27th, 2016

The common stock of NCP paid $1.32 in dividends last year. Dividends are expected to grow at an 8 percent annual rate foran infinite number of years

The common stock of NCP paid NCP paid $1.32 in dividends last year. Dividends are expected to grow at an 8 percent annual rate foran infinite number of years.
a) If NCP s current market price is $23, what is the stock s expected rate of return?
b) If your required rate is 10.5 percent, what is the value of the stock for you?
c) Should you make the investment?