Dividend Initiation and Stock Value a Firm Does Not Pay

question 20

Multiple Choice

Dividend Initiation and Stock Value A firm does not pay a dividend.It is expected to pay its first dividend of $0.15 per share in three years.This dividend will grow at 9 percent indefinitely.Using a 10 percent discount rate,compute the value of this stock.

• A)$12.28
• B)$12.40
• C)$16.35
• D)$16.50

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