Multiple Choice
Diets For You announced today that it will begin paying annual dividends next year.The first dividend will be $0.12 a share.The following dividends will be $0.15,$0.20,$0.50,and $0.75 a share annually for the following 4 years,respectively.After that,dividends are projected to increase by 4 percent per year.How much are you willing to pay to buy one share of this stock today if your desired rate of return is 8.5 percent?
A) $11.67
B) $11.94
C) $12.78
D) $13.50
E) $13.86
Correct Answer:
Verified
Correct Answer:
Verified
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