The Back Room Just Paid an Annual Dividend of $1

question 79

Multiple Choice

The Back Room just paid an annual dividend of $1.65 a share.The firm expects to pay dividends forever and to increase the dividend by 3 percent annually.What is the expected value of this stock five years from now if the discount rate is 14 percent?

• A)$17.39
• B)$17.91
• C)$18.06
• D)$18.52
• E)$19.08

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Definitions:

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