A stock will not pay dividends until three years from now. The dividend then will be $2.00

Question:

A stock will not pay dividends until three years from now. The dividend then will be $2.00 per share, the dividend payout ratio will be 40 percent, and return on equity will be 15 percent. If the required rate of return is 12 percent, which of the following is closest to the value of the stock?

image text in transcribed