Multiple Choice
The Slim Waist announced today that they will begin paying annual dividends. The first dividend will be paid next year in the amount of $.35 a share. The following dividends will be $.40, $.55, and $.70 a share annually for the following three years, respectively. After that, dividends are projected to increase by 2.5% per year. How much are you willing to pay to buy one share of this stock if your desired rate of return is 12%?
A) $5.47
B) $5.82
C) $5.92
D) $6.03
E) $6.27
Correct Answer:
Verified
Correct Answer:
Verified
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