Testbank, Question 71

Junkies Corporation has just paid a dividend of $0.90. Dividends are expected to grow at 20% for years one and two, 15% for years three and four, 10% for years five and six, and 5% thereafter. What is the expected dividend for year 10 if the required return is 18 percent?

$2.40

$2.52

$2.65

$2.78