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Hudson Corporation will pay a dividend of $3.26 per share next year. The company pledges to increase its dividend by 6.5 percent per year indefinitely. If you require a return of 15 percent on your investment, how much will you pay for the company’s stock today?

Respuesta :

The value of the company' stock today given the dividend, growth rate and required return is $38.35.

What is the value of the company's stock today?

The value of the company's stock today can be determined using the gordon constant growth dividend model.

Gordon constant growth dividend model = dividend to be paid next year / (required return - growth rate)

$3.26 / (0.15 - 0.065) = $38.35

To learn more about how to determine the value of a stock, please check: https://brainly.com/question/18648993

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