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Minimight Company has never paid a dividend, and there are no plans to pay dividends during the next four years. But, in five years -
Minimight Company has never paid a dividend, and there are no plans to pay dividends during the next four years. But, in five years - that is, at the end of year 5 - the company expects to start paying a dividend equal to $2 per share. The same dividend will be paid for the remainder of Minimight's existence. If investors require a 10 percent rate of return to purchase the company's common stock, what should be the market value of Minimight's stock today according to the DDM? 1) $13.66 2) $15.55 3) $20.00 4) $20.54 5) $22.54 5 Pape 8 nf 9
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