Vincent’s hotel currently pays a $2.20 common stock dividend. dividends have been recently growing at a 3% annual rate and are expected to continue growing at this rate for the next 2 years. thereafter, the growth rate is expected to be 0% for the foreseeable future. what is the current value of vincent’s hotel common stock to an investor requiring 17% rate of return?

The current value of Vincent's Hotel common stock is US$ 12.95, that fulfills the requirement of an investor of 17% of rate of return annually.

Step-by-step explanation:

1. Let's review the information given for answering correctly the question:

Currently common stock dividend = US$ 2.20

Annual growth of the dividend for the next 2 years = 3%

Annual growth of the dividend after the next 2 years = 0%

2. What is the current value of Vincent’s Hotel common stock to an investor requiring 17% rate of return?

17% = 0.17

Current value of Vincent's Hotel common stock = 2.20/0.17

Current value of Vincent's Hotel common stock = US$ 12.95

y = 3x+4

step-by-step explanation:

to find the slope

slope = (y2-y1)/ (x2-x1)

    = (-8-4)/ (-4-0)

    = -12/-4

  = 3

using the slope intercept form of a line

y= mx+b

we know the slope is 3

we know the y intercept is 4 ( the point where it crosses the y axis or x=0)

y = 3x+4