Kool Eyeglasses Inc. is forecasting its dividends on its common stock over the next four years to be as follows: a $3.00 dividend in year one, a $3.50 dividend in year 2, no dividend in year three, and a $4.50 dividend in year 4. The company also expects that dividends will grow at 6.5% yearly thereafter. Find the stock price today. Assume that r=10%.
Kool Eyeglasses Inc. is forecasting its dividends on its common stock over the next four years to be as follows: a $3.00 dividend in year one, a $3.50 dividend in year 2, no dividend in year three, and a $4.50 dividend in year 4. The company also expects that dividends will grow at 6.5% yearly thereafter. Find the stock price today. Assume that r=10%.
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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- Kool Eyeglasses Inc. is
forecasting its dividends on its common stock over the next four years to be as follows: a $3.00 dividend in year one, a $3.50 dividend in year 2, no dividend in year three, and a $4.50 dividend in year 4. The company also expects that dividends will grow at 6.5% yearly thereafter. Find the stock price today. Assume that r=10%.
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