Great Lakes Christmas Tree Co. expects to pay an annual dividend of P2 per share in perpetuity on its preferred shares starting one year from now. The firm is committed solely to its steady North American Christmas tree business (as opposed to, say, diversifying into landscape shrubbery). This profile warrants a required return of 6%. What is the present value of this dividend stream for investors? a.P12.00 b.P1.89 c.P33.33 d.P2.12

Great Lakes Christmas Tree Co. expects to pay an annual dividend of P2 per share in perpetuity on its preferred shares starting one year from now. The firm is committed solely to its steady North American Christmas tree business (as opposed to, say, diversifying into landscape shrubbery). This profile warrants a required return of 6%. What is the present value of this dividend stream for investors? a.P12.00 b.P1.89 c.P33.33 d.P2.12

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 12P

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