Consider a firm that has just paid a dividend of $2. An analyst expects dividends to grow at a rate of 8% per year for the next five years. After that dividends are expected to grow at a normal rate of 5% per year. Assume that the appropriate discount rate is 7%. The price of the stock today (P0) is:.A. $136.29.
B. $133.03.
C. $120.33.
D. $123.43.
E. $126.60.
Answers: 1
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Consider a firm that has just paid a dividend of $2. An analyst expects dividends to grow at a rate...
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