Question
X Inc. has the following expected dividends: $2.00 in one year, $3.50 in two years, and $2.00 in three years. After that, its dividends are
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X Inc. has the following expected dividends: $2.00 in one year, $3.50 in two years, and $2.00 in three years. After that, its dividends are expected to grow at 4.00% per year forever (so that year 4s dividend will be 4.00% more than $2.00 and so on). If X Inc.s equity cost of capital is 11.00%, what is its current stock price?
(a) $33.21 (b) $27.83 (c) $33.53 (d) $34.07
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Creating Financial Value A Guide For Senior Executives With No Finance Background
Authors: Malcolm Allitt
1st Edition
1472922719, 978-1472922717
