Analysts expect the following dividends from SE Corp.: a dividend of $2.74 per share will be paid tomorrow. One year from now a dividend of $3.14 will be paid, two years from now a dividend of $3.88, and thereafter dividends are expected to grow at a constant rate of 7% per year permanently. According to the analysts, the cost of equity of the company will remain at 9.7%. The current share price is closest to (nearest cents): a. $136.60 b. $125.30 c. $133.86 d. $131.12

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Analysts expect the following dividends from SE Corp.: a dividend of $2.74 per share will be paid tomorrow. One year from now a dividend of $3.14 will be paid, two years from now a dividend of $3.88, and thereafter dividends are expected to grow at a constant rate of 7% per year permanently. According to the analysts, the cost of equity of the company will remain at 9.7%. The current share price is closest to (nearest cents):

a. $136.60
b. $125.30
c. $133.86
d. $131.12

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