Today your company paid a dividend (D0) of $3 per share. The growth rate of the dividend is expected to be 15% for the n

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answerhappygod
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Today your company paid a dividend (D0) of $3 per share. The growth rate of the dividend is expected to be 15% for the n

Post by answerhappygod »

Today your company paid a dividend (D0) of $3 per share. The
growth rate of the dividend is expected to be 15% for the next two
years, and then 6% thereafter. The cost of capital is 10%.
What do you expect the dividend to be in three years from now
(D3) (to the nearest cent)?
a) $3.63 b) $3.85 c) $3.97 d) $4.21
What is your estimate of your firm’s stock price two years from
now (P2)?
a) $96.20 b) $79.50 c) $105.10 d) $86.90 e) $93.30
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