Suppose that you own 100 shares of Video Technical (VT) stock. Currently, analysts predict that VT will
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Suppose that you own 100 shares of Video Technical (VT) stock. Currently, analysts predict that VT will pay its first semiannual common stock dividend of $0.40 per share six months from now. They expect this semiannual dividend to remain the same for ten and one-half years. After the 21st semiannual dividend payment, dividends will exhibit a more normal growth rate of 1.0% every six months indefinitely. Investors require a 10% annual rate of return, compounded semiannually, on VT's common stock.
- The price of 100 shares ofVCcommon stock at the end of the 10th year.
- The price of 100 shares ofVCcommon stock at the end of the fifth year.
- The price of 100 shares ofVCcommon stock today.
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1259024962
6th Canadian edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim
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