Dividend Initiation and Stock Value a Firm Does Not Pay

question 108

Multiple Choice

Dividend Initiation and Stock Value A firm does not pay a dividend. It is expected to pay its first dividend of $0.10 per share in 2 years. This dividend will grow at 11 percent indefinitely. Using a 13 percent discount rate, compute the value of this stock.

• A) $4.42
• B) $4.59
• C) $5.43
• D) $7.21

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Social Economic Status; a measure of an individual's or group's economic and sociological standing, often based on income, education, and occupation.

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