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Dividend Initiation and Stock Value a Firm Does Not Pay

Question 117

Multiple Choice

Dividend Initiation and Stock Value A firm does not pay a dividend.It is expected to pay its first dividend of $0.10 per share in two years.This dividend will grow at 11 percent indefinitely.Using a 13 percent discount rate,compute the value of this stock.


A) $4.42
B) $4.59
C) $5.43
D) $7.21

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