Lincoln Thomas Believes That the Harris Group Will Pay a Dividend

question 109

Short Answer

Lincoln Thomas believes that the Harris Group will pay a dividend of $4 on its common stock in year 2.Thereafter, you expect dividends to grow at a rate of 12 percent a year in perpetuity.If Lincoln requires a return of 24 percent on his investment, how much should he be willing to pay for the stock?

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Definitions:

Ethical Focus

The prioritization of ethical considerations and principles in the decision-making processes and practices of an individual or organization.

Deplete

To deplete means to use up or exhaust the supply or resources of something.

Performance Goals

Specific, measurable objectives set by individuals or teams to achieve desired levels of performance within a set timeframe.

High

A general term that can refer to being at or in an elevated position or state, indicating a level above average or normal.