JAY Corp Is Expected to Pay a Dividend of $5

question 88

Multiple Choice

JAY Corp. is expected to pay a dividend of $5.00 per year indefinitely. If the appropriate rate of return on this stock is 13 percent per year, and the stock consistently goes ex-dividend 30 days before the dividend payment date, what will be the expected minimum price in light of the dividend payment logistics?

• A) $3.16
• B) $38.08
• C) $38.46
• D) $43.03

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