Wilson's Furniture Is Experiencing Good Growth So Has Decided to Commence

question 28

Multiple Choice

Wilson's Furniture is experiencing good growth so has decided to commence paying dividends starting next year. The first dividend will be $0.50 a share with annual increases of 4 percent in the dividend amount. The discount rate is 11 percent. What will the value of this stock be three years from now?

• A) $7.50
• B) $7.72
• C) $8.03
• D) $8.23
• E) $8.44