Question
Canyon Buff Enterprise (CDE) is expected to pay a dividend of $2.5 next year, $3 in the second year, and to grow the dividend at
Canyon Buff Enterprise (CDE) is expected to pay a dividend of $2.5 next year, $3 in the second year, and to grow the dividend at a constant growth rate of 1.5% starting in year 3. If the required rate of return for CDE is 5%, what is the intrinsic value of a share of CDE under the dividend discount model? (Hint: Draw a timeline.)
| A. | $88.01 | |
| B. | $59.52 | |
| C. | $81.63 | |
| D. | $84.01 |
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Options Trading For Beginners
Authors: Mike Hartley
1st Edition
979-8864514832
