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Leslie's Unique Clothing Stores offers a common stock that pays an annual dividend of $2.60 a share. The company has promised to maintain a constant dividend. How much are you willing to pay for one share of this stock if you want to earn a return of 13.80 percent on your equity investments

Respuesta :

Answer:

$18.84

Explanation:

The amount i would be willing to pay is the present value of the dividend payment

Present value = [tex]\frac{dividend}{r}[/tex]

r = interest rate

2.6 / 0.1380 =  $18.84

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