Auto Transmissions is expected to pay annual dividends of $1.90 and $2.10 over the next two years,

Question:

Auto Transmissions is expected to pay annual dividends of $1.90 and $2.10 over the next two years, respectively. After that, the company expects to pay a constant of $2.30 a share. What is the value of this stock at a required return of 15 percent?

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...