Gen Corp. is expected to pay a dividend of $3.20 per year indefinitely

Gen Corp. is expected to pay a dividend of $3.20 per year indefinitely. The appropriate rate of return on this stock is 12 percent per year, and the stock consistently goes ex-dividend 40 days before dividend payment date.

What will be the expected minimum price in light of the dividend payment logistics? (Use 365 days a year. Do not round intermediate calculations and round your final answer to 2 decimal places.)

Minimum stock price$____

What will be the expected maximum price in light of the dividend payment logistics? (Use 365 days a year. Do not round intermediate calculations and round your final answer to 2 decimal places.)

Maximum stock price$ _____

Here’s the SOLUTION

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