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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Question
Transcribed Image Text:A firm's last annual dividend was $1.98 per share. The firm is planning on paying $2, $2, $2.50, and $3 per share over the
next four years, respectively. After that, the dividend will be a constant $2.50 per share per year. The required rate of
return is 13 percent. What is the current price of this stock?
Multiple Choice
$19.17
$21.96
$16.57
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