Question

gator tires pays a constant annual dividend of $1.21 per share. how much are you willing to pay for one share if you require a rate of return of 9.3 percent?

Answer 1

The amount  you are  willing to pay for one share if you require a rate of return of 9.3 percent is $13.01.

Using this formula

Amount=Annual dividend/Required rate of return

Where:

Annual dividend= $1.21 per share

Required rate of return=9.3% or .093

Let plug in the formula

Amount=$1.21/.093

Amount=$13.01

Inconclusion the amount  you are  willing to pay for one share if you require a rate of return of 9.3 percent is $13.01.

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