The Stock of the Narnia Corporation Is Expected to Pay

question 4

Multiple Choice

The stock of the Narnia Corporation is expected to pay a dividend of $1.50 next year. This dividend is expected to grow at a constant rate of 10% a year. If you require a 12% return on
The stock, what is the maximum price you should pay for a share of it?

• A)$82.50
• B)$84.00
• C)$75.00
• D)none of the above

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