You expect a stock to pay dividends of $1.80, $1.95 and $2.60 over the next 3 years.
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Question:
You expect a stock to pay dividends of $1.80, $1.95 and $2.60 over the next 3 years. You believe the stock will sell for $30.00 at the end of the third year.
A. If the discount rate of the stock is 10%, what is the stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
B. What is the dividend yield for year 1? (Do not round up 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 up intermediate calculations. Enter your answer as a percentage, rounded to 2 decimal places.)
Related Book For
Intermediate Financial Management
ISBN: 978-1285850030
12th edition
Authors: Eugene F. Brigham, Phillip R. Daves
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