# Bach Musics most recent annual dividend was $1.50 per share (D 0 = 1.50), and the firms

## Question:

Bach Music’s most recent annual dividend was $1.50 per share (D_{0} = 1.50), and the firm’s required return is 9%. Find the market value of Bach’s shares when:

**a.** Dividends are expected to grow at 10% annually for 2 years, followed by a 5% constant annual growth rate in year 3 to infinity.

**b.** Dividends are expected to grow at 10% annually for 2 years, followed by a 0% constant annual growth rate in year 3 to infinity.

**c.** Dividends are expected to grow at 10% annually for 2 years, followed by an 8% constant annual growth rate in year 3 to infinity.

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**Related Book For**

## Principles Of Managerial Finance Brief

**ISBN:** 9781292267142

8th Global Edition

**Authors:** Chad J. Zutter, Scott B. Smart