1. The ABV Inc' current stock price is $50.00. The discount rate is 10%. The constant growth rate in dividends per share is 5%. If you buy a share of ABV Inc. at the current market price and hold it for at least 2 years. What do you expect the value of your dividend check to be 2 years from today? A S145 B. $180 C. S263 D. $2.96 E S3.25

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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1. The ABV Inc' current stock price is $50.00. The discount rate is 10%. The constant growth rate in
dividends per share is 5%. If you buy a share of ABV Inc. at the current market price and hold it for at least 2
years. What do you expect the value of your dividend check to be 2 years from today?
A. $1.45
B. $1.80
C. $263
D. $2.96
E. $3.25
Transcribed Image Text:1. The ABV Inc' current stock price is $50.00. The discount rate is 10%. The constant growth rate in dividends per share is 5%. If you buy a share of ABV Inc. at the current market price and hold it for at least 2 years. What do you expect the value of your dividend check to be 2 years from today? A. $1.45 B. $1.80 C. $263 D. $2.96 E. $3.25
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