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The Lighthouse Co

Question 34

Multiple Choice

The Lighthouse Co.is in a downsizing mode.The company paid a €2.50 annual dividend last year. The company has announced plans to lower the dividend by €.50 a year.Once the dividend Amount becomes zero, the company will cease all dividends permanently.The required rate of teturn is 16%.What is one share of this equity worth?


A) €3.76
B) €4.08
C) €4.87
D) €5.13
E) €5.39

Correct Answer:

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