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 (34.47 KiB) Viewed 27 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 $4.93 dividend, and the expectation is the MFDC dividends will increase in value by 3.4% each year indefinitely. You believe that a fair risk adjusted rate of return for this company would be 16.80%. 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.) Type your answer....