Multiple Choice
The growth in per share FCFE of CBS, 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 per share FCFE is expected to be 2% per year, indefinitely. The required rate of return on CBS, Inc. is 12%. Last year's per share FCFE was $2.00. The first three dividends are worth _______ today.
A) $12.14
B) $10.00
C) $8.99
D) $9.39
E) None of the above
Correct Answer:
Verified
Correct Answer:
Verified
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