Question: The Phone Book Co. is in a downsizing mode. The company will pay the following dividends and will then go out of business after 2020.
The Phone Book Co. is in a downsizing mode. The company will pay the following dividends and will then go out of business after 2020.
| 2016 (D1) | 2017 (D2) | 2018 (D3) | 2019 (D4) | 2020 (D5) |
| $2.00 | $1.50 | $1.00 | $0.50 | $0.00 |
The required rate of return is 15%. What is one share of this stock worth?
| $2.72 | ||
| $2.32 | ||
| $5.65 | ||
| $3.82 | ||
| $5.12 |
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