Hadlock Healthcare expects to pay a $3.00 dividend at the end of the year (D1 = $3.00). The stock’s dividend is expected to grow at a rate of 15 percent a year until three years from now (t = 3). After this time, the stock’s dividend is expected to grow at a constant rate of 4 percent a year. The stock’s required rate of return is 11 percent. What is the price of the stock today? 46.32 54.48 48.33 51.50
Hadlock Healthcare expects to pay a $3.00 dividend at the end of the year (D1 = $3.00). The stock’s dividend is expected to grow at a rate of 15 percent a year until three years from now (t = 3). After this time, the stock’s dividend is expected to grow at a constant rate of 4 percent a year. The stock’s required rate of return is 11 percent. What is the price of the stock today? 46.32 54.48 48.33 51.50
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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Hadlock Healthcare expects to pay a $3.00 dividend at the end of the year (D1 = $3.00). The stock’s dividend is expected to grow at a rate of 15 percent a year until three years from now (t = 3). After this time, the stock’s dividend is expected to grow at a constant rate of 4 percent a year. The stock’s required rate of return is 11 percent. What is the price of the stock today?
46.32
54.48
48.33
51.50
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