The Bell Weather Co

Multiple Choice

The Bell Weather Co.is a new firm in a rapidly growing industry.The company is planning on increasing its annual dividend by 20 percent next year and then decreasing the growth rate to a constant 5 percent per year.The company just paid its annual dividend in the amount of $1 per share.What is the current value of a share if the required rate of return is 14 percent?

A) $13.28
B) $13.42
C) $13.33
D) $13.19
E) $13.24