Question: Hi, I would like to get help to answer this question: you expect a share of stock to pay dividends of $1, $1.25 and $1.50
Hi, I would like to get help to answer this question:
you expect a share of stock to pay dividends of $1, $1.25 and $1.50 in each of the next 3 years. You believe the stock will sell for $20 at the end of the third year.
a) What is the stock price if the discount rate for the stock is 10%? Here I have got $18, but is that correct?
b) What will the dividend yield be for year 1?
c) what will be the dividend yield at the start of year 2?
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