AT&T just paid an $8 dividend, dividends are expected to grow at a 10% rate for the next three years and at a 5% rate after that. What is the value of the stock if investors require a 15% return to purchase the stock?

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
Section: Chapter Questions
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*assume all bonds make semiannual coupon payment*
AT&T just paid an $8 dividend, dividends are expected to
grow at a 10% rate for the next three years and at a 5%
rate after that. What is the value of the stock if investors
require a 15% return to purchase the stock?
Transcribed Image Text:AT&T just paid an $8 dividend, dividends are expected to grow at a 10% rate for the next three years and at a 5% rate after that. What is the value of the stock if investors require a 15% return to purchase the stock?
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