What Is the Current Value of Frocks & Socks Clothiers

question 93

Multiple Choice

What is the current value of Frocks & Socks Clothiers, Inc., to an investor who has a required rate of return of 12 percent? The current dividend is $1.00, and the dividends are expected to grow 8 percent per year for 3 years. At the end of 3 years the investor expects to sell the security for $76.

• A) $79.51
• B) $56.90
• C) $51.13
• D) $76.00

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