What Is the Expected Dividend to Be Paid in Three

question 127

Multiple Choice

What is the expected dividend to Be paid in three years if yesterday's dividend was $6.00, dividends are expected to grow at a constant 6 percent annual rate, and the firm has a 10 percent expected return?

• A)$6.75
• B)$7.15
• C)$7.80
• D)$9.37 D₃ = D_o x (1 + g)³
• = $6.00 (1.06)³

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