Problemmacrohard company expects to pay a dividend of 6 per, Ask an Expert

Accounting

Problem:

Macrohard Company expects to pay a dividend of $6 per share at the end of year one, $8 per share at the end of year two and then be sold for $136 per share.

Required:

Question: If the required rate on the stock is 20%, what is the current value of the stock?

A) $100

B) $105

C) $110

D) $120

Note: Provide support for rationale.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91169118

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