Question
Suppose that you estimate that REIT Corporation, will skip its next two annual dividends, but then resume paying a dividend, with the first dividend
Suppose that you estimate that REIT Corporation, will skip its next two annual dividends, but then resume paying a dividend, with the first dividend paid to be equal to $2.00. (Thus, the initial timing of the first dividend payment is t=3) If all subsequent dividends will grow at a constant rate of 5% per year and the required rate of return on REIT is 10% per year, what should be its price? 36.28 O 34.55 O 33.06 30.05
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Public Finance and Public Policy
Authors: Jonathan Gruber
4th edition
1429278455, 978-1429278454
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