Question
9. ABC Corporation is expected to pay a $5 dividend in year 1 and a $6.5 dividend in year 2. After year 2, dividends are
9. ABC Corporation is expected to pay a $5 dividend in year 1 and a $6.5 dividend in year 2. After year 2, dividends are expected to increase at the rate of 2.5% per year. An appropriate required return for 5 the stock is 12%. Using the multistage DDM, the stock should be worth today.
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Business Forecasting
Authors: John E. Hanke, Dean Wichern
9th edition
132301202, 978-0132301206
