10. You wish to value the stocks of Hormel Food, which is currently paying a dividend of...
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Question:
10. You wish to value the stocks of Hormel Food, which is currently paying a dividend of $0.39. This dividend is expected to grow at a rate of 12.5% annually for the next five years, and afterwards the dividend growth rate will decline linearly from 12.5% to 6.75% over the next ten years. If your required rate of return is 8.90%, what will be value of stock per share today?
a. $19.97
b. $29.49
c. $19.14
d. $21.51
e*. $31.07
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