Question
ABC currently pays no dividends. Today, the firm announced that it will pay its first dividend of $1 per share in four years, then $1.70
ABC currently pays no dividends. Today, the firm announced that it will pay its first dividend of $1 per share in four years, then $1.70 in each of the following three years, and the subsequent dividends are expected to grow at a constant rate of 5 percent per year. What is the stock price today if the discount rate is 10%?
| $19.40 | ||
| $21.89 | ||
| $34.73 | ||
| $17.93 |
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Investment Science
Authors: David G. Luenberger
1st Edition
0195108094, 978-0195108095
