Question
The stock of Sedly Inc. is expected to pay the following dividends. Year 1 2 3 4 Dividend $2.30 $3.50 $1.75 $2.20
The stock of Sedly Inc. is expected to pay the following dividends.
| Year | |||||
| 1 | 2 | 3 | 4 | ||
| Dividend | $2.30 | $3.50 | $1.75 | $2.20 | |
At the end of the fourth year its value is expected to be $37.70. What should Sedly sell for today if the return on stocks of similar risk is 13.387%?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the present value of the dividends and the future value of the stock at the end of the ...
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Step: 2
Step: 3
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Practical financial management
Authors: William r. Lasher
5th Edition
0324422636, 978-0324422634
