ABC Corp Is Expected to Pay a Dividend of $5

question 108

Multiple Choice

ABC Corp. is expected to pay a dividend of $5.00 per year indefinitely. If the appropriate rate of return on this stock is 5 percent per year, and the stock consistently goes ex-dividend 45 days before the dividend payment date, what will be the expected minimum price in light of the dividend payment logistics?

• A) $99.40
• B) $100.00
• C) $103.77
• D) $123.29

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