A stock expects to pay dividends of $3.77 per share one year from today; $4.56 per share two years from today; and $5.95 per share three years from today. After that, dividends are expected to be constant at $6.22 per share per year indefinitely. Investors require a rate of return of 10 percent on this stock. How much should this stock sell for today?
a. $58.40.
b. $56.71.
c. $50.20.
d. $54.15.
e. $51.99.
Answers: 3
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A stock expects to pay dividends of $3.77 per share one year from today; $4.56 per share two years f...
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