You expect a stock to pay dividends of $1.00, $1.25, and $1.50 in each of the next
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Question:
You expect a stock to pay dividends of $1.00, $1.25, and $1.50 in each of the next 3 years. You think the shares will sell for $20 at the end of the third year. to.
a .What is the price of the stock if the discount rate on the stock is 10%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
b. What is the dividend yield for year 1? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.)
c. What will the dividend yield be at the beginning of year 2? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.)
Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
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