The Zeta Corporation's current dividend is $3.85. If future dividends are expected to grow at 4 percent

Question:

The Zeta Corporation's current dividend is $3.85. If future dividends are expected to grow at 4 percent forever, which of the following amounts should Zeta stock sell for if the required rate of return on the stock is 14 percent?

a. $28.57.

b. $38.50.

c. $40.04.

d. $41.60.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...