Suppose a firms expected dividends for the next three years, Ask an Expert

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Suppose a firm's expected dividends for the next three years are as follows: d1=$1.10, d2=$1.20, and d3=$1.30. After three years, the firm's dividends are expected to grow at 5% per year. What should the current price of the firm's stock be today if investors require a rate of return of 12% on the stock? (Do not round intermediate calculations. Round off final answer to the nearest $0.01)

a) $61.30

b) $10.10

c) $16.74

d) $24.12

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Financial Management, Finance

Category:- Financial Management
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