KBC Inc. just paid a dividend of $12.00 per share but plans to pay $5.00 per share

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KBC Inc. just paid a dividend of $12.00 per share but plans to pay $5.00 per share from the next year till year 22 , after which, the dividend will grow at 5% for good. The required rate of return on this stock is 10%.

a. What is the current price of KBC's stock?

b. What is the expected stock price five years from today?

c. What is the expected stock price 27 years from today?

Related Book For answer-question

Corporate Finance Core Principles And Applications

ISBN: 9781260571127

6th Edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan

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Posted Date: May 04, 2023 06:08 AM

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KBC Inc. just paid a dividend of $12.00 per share but plans to pay $5.00 per share

Question:

Expert Answer:

a To calculate the current price of KBCs stock we need to find the present value of all future dividends and the present value of the stock at year 22 ... View the full answer

Corporate Finance Core Principles And Applications

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