WEGrow Inc. is not currently paying a dividend. You predict that, in seven years (i.e., at t=7), WEGrow Will pay a dividend for the first time. The dividend will be $0,50 per share. You expect that this dividend will grow at a rate of 6% per year indefinitely. The required return on companies such as WEGrow is 19% per annum. What is the value of an ordinary share today? Ignore all taxes and transactions costs, and round your answer to the nearest penny. 

Options: 

A $1.21 

B $1.29 

C $1.35

D $1.61 

E None of the above is correct.

Answer rating: 100% (QA)

First we know that the dividend will start in 7 years so we need to find the present value of the di... View the full answer