Multiple Choice
New Products pays no dividend at the present time. Starting in Year 3, the firm will pay a dividend of $.25 per share for two years. After that, the company plans on paying a constant $.75 a share annual dividend indefinitely. How much should you pay per share to purchase this stock today at a required return of 13.8 percent?
A) $3.78
B) $3.56
C) $4.37
D) $4.61
E) $4.98
Correct Answer:
Verified
Correct Answer:
Verified
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