A company is expecting a period of intense growth and has decided to retain more of their
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Question:
A company is expecting a period of intense growth and has decided to retain more of their earnings to help finance that growth.As a result, the company is going to reduce the annual dividend by 14.00% a year for the next three years.After those three years, the company will maintain a constant dividend of $0.90 a share.Recently, the company paid $1.70 as the annual dividend per share. What is the market value of this stock if the required rate of return is 11.00%?
Question 26 options:
a)$8.88
b)$9.11
c)$9.34
d)$9.57
e)$9.79
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