Question
Use the information below for questions 29 - 30. AeroSpace determined its future dividends. The current dividend is $2.00, next year it will grow by
Use the information below for questions 29 - 30. AeroSpace determined its future dividends. The current dividend is $2.00, next year it will grow by 25%, the year after by 15%, then for two years it will grow at 9%, and finally a constant sustainable growth rate of 4.5%. Comparable investments have a rate of return of 12%. 29. What is the PV in todays dollars of the dividends during the period (four years) of irregular growth? a. $.7.99 b. $8.57 c. $8.93 d. $10.95 30. What is the value in todays dollars of all the dividends from the end of year five into infinity? a. $30.25 b. $27.00 c. $28.94 d. $29.84
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