Charlie Lee has invested in stock of Izepodd Enterprise, a company that's been in business...
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Charlie Lee has invested in stock of Izepodd Enterprise, a company that's been in business for about three years but has such a strong product line they expect to continue to offer their products and services forever. Izepodd's current dividend is $1.38 per share. The company expects to grow this dividend at the constant rate of 2.85% per year forever. What interest rate (also known as the discount rate) is consistent with a stock price for Izepodd of $21.25 per share as given by the present value of a constant growth perpetuity?
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