CX Enterprises has the following expected dividends: $1.04 in one year, $1.24 in two years, and $1.34 in three years. After that, its dividends are expected to grow at 4% per year forever (so that year 4's dividend will be 4% more than $1.34 and so on). If CX's equity cost of capital is 12.4%, what is the current price of its stock? The price of the stock will be $. (Round to the nearest cent.)
CX Enterprises has the following expected dividends: $1.04 in one year, $1.24 in two years, and $1.34 in three years. After that, its dividends are expected to grow at 4% per year forever (so that year 4's dividend will be 4% more than $1.34 and so on). If CX's equity cost of capital is 12.4%, what is the current price of its stock? The price of the stock will be $. (Round to the nearest cent.)
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
Problem 1PS
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Transcribed Image Text:CX Enterprises has the following expected dividends: $1.04 in one year, $1.24 in two years, and $1.34 in three years. After that, its dividends are expected to grow at 4% per year forever (so that year 4's dividend will be 4% more than $1.34 and
so on). If CX's equity cost of capital is 12.4%, what is the current price of its stock?
The price of the stock will be $
(Round to the nearest cent.)
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