You are contemplating the purchase of shares in Marc's Ferrari Driving Company (MFDC). You believe that investors purcha

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You Are Contemplating The Purchase Of Shares In Marc S Ferrari Driving Company Mfdc You Believe That Investors Purcha 1 (31.04 KiB) Viewed 22 times

You are contemplating the purchase of shares in Marc's Ferrari Driving Company (MFDC). You believe that investors purchase MFDC primarily for the constant stream of dividends the firm reliably pays. MFDC just paid a $4.87 dividend, and the expectation is that MFDC will continue making that same payment indefinitely. You believe that a fair risk adjusted rate of return for this company would be 20.39%. What is the maximum price you should be willing to pay for a share of MFDC today? (answer in dollars, rounded to the nearest penny. For example, if your answer is $123,456.78 you should enter 123456.78.)