Over the next three years, Distant Groves will pay annual dividends of $.65, $.70, and $.75 a share, respectively. After that, dividends are projected to increase by 2 percent per year. What is one share of this stock worth today at a required return of 12.5 percent?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
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Over the next three years, Distant Groves will pay annual dividends of $.65, $.70, and $.75 a
share, respectively. After that, dividends are projected to increase by 2 percent per year. What
is one share of this stock worth today at a required return of 12.5 percent?
Transcribed Image Text:Over the next three years, Distant Groves will pay annual dividends of $.65, $.70, and $.75 a share, respectively. After that, dividends are projected to increase by 2 percent per year. What is one share of this stock worth today at a required return of 12.5 percent?
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