Question
Use the following information to answer questions 13 and 14. Siesta Corp. will pay a dividend of $7 per year for the next 10 years,
Use the following information to answer questions 13 and 14.
Siesta Corp. will pay a dividend of $7 per year for the next 10 years, and then stop paying dividends forever. The required rate of the return from stocks in this risk class is 14 percent.
What is the present value of the dividend at the end of year 7?
What should be the market price of the stock at present?
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Personal Finance Turning Money into Wealth
Authors: Arthur J. Keown
8th edition
134730364, 978-0134730363
