Pepperazzi, Inc. will not pay a dividend for three years.Four years from today, the company is expected to pay a dividend of $3.00 per share (that is, D4= 3.00). This dividend is expected to grow at 4% per year forever.The required rate of return on Pepperazzi's stock is 18%. The stockshould sell for $____ today (that is, at t = 0).

Answer rating: 100% (QA)

To calculate the present value of the future dividend payments and determine the sto... View the full answer