Fast Wheels, Inc. expects to pay an annual dividend of $0.72 next year. Dividends have been growing at a compound annual rate of 6 percent and are expected to continue growing at that rate. What is the value of a share of stock of Fast Wheels to an investor who requires a 14 percent rate of return

The reason for this rate of return and the compound rate of rate have to be divide through by 100% for a proper calculation to get the actual value of a share of stock.

A dividend is a share of profits and retained earnings that a firm pays out to its shareholders. When a company generates a profit and accumulates retained earnings, those earning can be either reinvested in the business or paid out to shareholders as dividend.

tallinn tallinn · Answer 2 · 2022-03-25T13:56:54+01:00

When the value of a share of stock of Fast Wheels to an investor who requires a 14 percent rate of return is $9.00

Calculation of shareholders dividend

Compute the value: PO == $0.72 / (0.14 - 0.06) = $9.00

The reason behind this rate of return and also the compound rate of rate has to be divided by 100% for an accurate computation to get the actual value of a share of stock.

When A dividend is a share of profits and retained earnings that a firm pays out to its shareholders. When a company develops a profit and also accumulates retained earnings, those earnings can be either reinvested in the business or paid out to shareholders as dividends.

Find more information about shareholders dividend here:

https://brainly.com/question/24334747