An XYZ company doesnt pay dividends now but will start paying dividends in two years using the
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An XYZ company doesn’t pay dividends now but will start paying dividends in two years using the following schedule:
$1.15 in Year 2,
$1.75 in Year 3, and
$ 2.00 in Year 4.
After, the dividends will grow at a 2% growth rate indefinitely. If you require a 10% return on this investment, how much would you be willing to pay for this stock?
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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