Part B: The Crescent Corporation just paid a dividend of $2 per share and is expected...

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Part B: The Crescent Corporation just paid a dividend of $2 per share and is expected to continue paying the same amount each year for the next four years. If you have a required rate of return of 13%, plan to hold the stock for four years, and are confident that it will sell for $30 at the end of four years, how much should you offer to buy it at today?

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4 Divdend per share 5 Period 6 Rate of return 7 Selling price 8 PV 4 13% 30 24.35 10 The amount willing to pay is the present value of future cash flows 12 13 14 15 16 17 18 19

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