Assume that at the end of the next year, Company A will pay a $2.00 dividend per

Question:

Assume that at the end of the next year, Company A will pay a $2.00 dividend per share, an increase from the current dividend of $1.50 per share. After that, the dividend is expected to increase at a constant rate of 5 percent. If you require a 12 percent return on the stock, what is the value of the stock?

a. $28.57

b. $28.79

c. $30.00

d. $31.78.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Fundamentals Of Investments Valuation And Management

ISBN: 9781266824012

10th Edition

Authors: Bradford Jordan, Thomas Miller, Steve Dolvin

Question Posted: