Multiple Choice
The growth in dividends of XYZ, Inc.is expected to be 10% per year for the next two years, followed by a growth rate of 5% per year for three years.After this five-year period, the growth in dividends is expected to be 2% per year, indefinitely.The required rate of return on XYZ, Inc.is 12%.Last year's dividends per share were $2.00.What should the stock sell for today?
A) $8.99
B) $25.21
C) $40.00
D) $110.00
Correct Answer:
Verified
Correct Answer:
Verified
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