Question
You expect a stock to pay dividends of $1.80, $1.95 and $2.60 over the next 3 years. You believe the stock will sell for $30.00
You expect a stock to pay dividends of $1.80, $1.95 and $2.60 over the next 3 years. You believe the stock will sell for $30.00 at the end of the third year.
A. If the discount rate of the stock is 10%, what is the stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
B. What is the dividend yield for year 1? (Do not round up intermediate calculations. Enter your answer as a percentage, rounded to 2 decimal places.)
C. What will the dividend yield be at the beginning of year 2? (Do not round up intermediate calculations. Enter your answer as a percentage, rounded to 2 decimal places.)
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Intermediate Financial Management
Authors: Eugene F. Brigham, Phillip R. Daves
12th edition
1285850033, 978-1305480698, 1305480694, 978-0357688236, 978-1285850030
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