Current stock price (dollars per share): 53.90 You project the


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Current stock price (dollars per share):              53.90 You project the firm will pay its first dividend at the end of year 5. You project constant dividends through the end of year 8.  After that, you think the growth rate in dividends will be: 1.70% Also, your required annual return is: 13.60% Suppose all earnings are paid out as dividends.What must the first dividend be so that the stock price is equal to the  present value of future dividends?Note:  in theory the dividends would go on through infinity.However, we can’t handle a number that large–so lets just use the first 100 actual dividends.  (Remember that the first dividend is delayed.) The first dividend would be how much? A Between 0.0 and 10.0 B Between 10.0 and 12.0 C Between 12.0 and 14.0 D Between 14.0 and 20.0 sunil99
posted a question · Mar 30, 2016 at 2:34pm

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