Suppose Microsoft Co. will pay a dividend of $1.9 per share one year from now (year 1), and $3.8 per share two years from now (year 2). After then (in other words, after the second year) dividends will grow at 3% per year forever. If the firm's equity cost of capital is 5%, what is their current price per share? $182.76 $5.26 $174.31 $195.70

Suppose Microsoft Co. will pay a dividend of $1.9 per share one year from now (year 1), and $3.8 per share two years from now (year 2). After then (in other words, after the second year) dividends will grow at 3% per year forever. If the firm's equity cost of capital is 5%, what is their current price per share? $182.76 $5.26 $174.31 $195.70

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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