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MG Inc. is a profitable company that is not paying a dividend on its common stock. Analyst Weber believes that MG will begin paying a
MG Inc. is a profitable company that is not paying a dividend on its common stock. Analyst Weber believes that MG will begin paying a $4.00 per share dividend in five years and that the dividend will increase 7% annually thereafter. If Weber believes the required return for MG is 12%, what is his estimated current value of MGs common stock?
| a. | $50.84 |
| b. | $80.00 |
| c. | $33.33 |
| d. | $72.46 |
| e. | $45.39 |
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