JEN Corp. is expected to pay a dividend of $4.75 per year indefinitely. If the appropriate rate of return on this stock is 8 percent per year, and the stock consistently goes ex-dividend 20 days before dividend payment date, what will be the expected maximum price in light of the dividend payment logistics?

The expected maximum price in light of the dividend payment logistics according to the dividend discount model will be $59.375

Explanation:

Using the dividend discount model given by the formula P = D / (r+g) where

P = Price

D = Dividend

r = rate of return

g = growth

The expected maximum price can be calculated as P = 4.75 / (0.08 + 0) = $59.375.

This means that if JEN Corp is expected to pay a dividend of$4.75 every year, the price of its share will be valued at $59.375.