Question
The growth in dividends of ABC, Inc. is expected to be 15% per year for the next three years, followed by a growth rate of
The growth in dividends of ABC, Inc. is expected to be 15% per year for the next three years, followed by a growth rate of 8% per year for two years. After this five-year period, the growth in dividends is expected to be 5% per year, indefinitely. The required rate of return on ABC, Inc. is 12%. The trailing twelve months of dividends per share were $2.00. What should the stock sell for today?
| A. | $68.04 | |
| B. | $45.07 | |
| C. | $40.63 | |
| D. | $37.39 | |
| E. | $27.74 | |
| F. | $63.65 |
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Personal Finance
Authors: E. Thomas Garman, Raymond E. Forgue, Jonathan Fox
14th Edition
0357901495, 9780357901496
