Langley Enterprises Pays a Constant Dividend of $0

question 73

Multiple Choice

Langley Enterprises pays a constant dividend of $0.85 a share.The company announced today that it will continue to pay the dividend for another 2 years after which time all dividends will cease.What is one share of this stock worth today if the required rate of return is 16.5 percent?

• A)$0.92
• B)$1.36
• C)$2.04
• D)$2.09
• E)$2.20

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