Your Local Toy Store Just Announced Its Annual Dividend Will

question 67

Multiple Choice

Your local toy store just announced its annual dividend will be $4 dividend next year, $3 the following year, and then a final liquidating dividend of $46 a share in Year 3. At a discount rate of 18 percent, what should one share sell for today?

• A) $36.21
• B) $31.48
• C) $35.64
• D) $39.09
• E) $33.54