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140.MDK, Inc. is a high growth firm that has never paid a dividend. The companyjust issued a press release stating that next year it plans
140.MDK, Inc. is a high growth firm that has never paid a dividend. The companyjust issued a press release stating that next year it plans on paying an annual dividend of $0.34. It also stated that dividends are expected to increase by 40% a year for each of the following four years and then increase by 4% annually thereafter. The required rate of return on this stock is 15%. What is the expected price per share of MDK stock six years from now? A. $9.12 B. $9.42 C. $12.35 D. $12.84 E. $14.14
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