Question
Last years dividend of Mystic Aromas Pty Ltd was $2.75. The growth in dividends is expected to be 8% per year for the next two
Last years dividend of Mystic Aromas Pty Ltd was $2.75. The growth in dividends is expected to be 8% per year for the next two years, followed by a growth rate of 4% per year for three years; after this five-year period, the growth in dividends is expected to be 2% per year, indefinitely. The required rate of return on Mystic Aromas is 11%. The price of the stock today should be closest to:
| A. | $8.99 | |
| B. | $36.41 | |
| C. | $39.71 | |
| D. | $110.00 | |
| E. | 105 |
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Pricing And Liquidity Of Complex And Structured Derivatives
Authors: Mathias Schmidt
1st Edition
3319459694, 978-3319459691
