Fellowes 22303 Perf-Ect Step File, 7 Sections, Steel, 7 x 8 7/8 x 9 3/8, Black

antiques are us is a mature manufacturing firm the company has just paid a dividend of ten dollars and 46 cents but management expects to reduce the payout by four percent per year indefinitely if you require an 11.5 percent return on the stock what will you pay for a share today this is simply our constant growth model with a slight twist instead of an increasing dividend growth rate we have a decreasing dividend growth rate management will cut the dividend by four percent per year as always our first step is to calculate our time one dividend our dividend at time one is simply equal to our time zero dividend of ten dollars and 46 cents x 1 plus the growth rate so in this case we take our ten dollar and 46 dividend since dividend at time 1 and multiply it by point nine six our dividend in time one is $10 0.04 two cents the next step then is to calculate our time zero price and our time