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You forecast that Dull company will pay a dividend of D=$40 at the end of this year. The dividend will decline in the second year
You forecast that Dull company will pay a dividend of D=$40 at the end of this year. The dividend will decline in the second year (D=$20). After the second year, dividends will then grow at an annual rate of 10% (For example, D=$22, D=$24.2,...). What is the current fair price of the Dull stock when the required/expected return is 20%?
A. $168.06 B. $175.00 C. $188.89 D. $200.00 E. $206.67
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