Last Week, Railway Cabooses Paid Its Annual Dividend of €1

Multiple Choice

Last week, Railway Cabooses paid its annual dividend of €1.20 per share.The company has been reducing the dividends by 10% each year.How much are you willing to pay to purchase share in this company if your required rate of return is 14%?

A) €4.50
B) €7.71
C) €10.80
D) €15.60
E) €27.00