Question: Bliley Plumbers pays no dividend at the present time. The company plans to start paying an annual dividend in the amount of $0.20 a share

Bliley Plumbers pays no dividend at the present time. The company plans to start paying an annual dividend in the amount of $0.20 a share for three years commencing three years from today (ie, in years 3, 4 and 5). Beginning in year 6, the company plans on paying a constant $1 a share dividend each year forever. How much are you willing to pay to buy a share of this stock if your required return is 11 percent?

Group of answer choices

$4.54

$6.62

$5.11

$3.66

$5.79

$4.07

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