Business Analyst MCQ
Equity Valuation
Assume that a stock is expected to pay dividends at the end of Year 1 and Year 2 of $1.25 and $1.56, respectively. Dividends are expected to grow at a 5% rate thereafter. Assuming that kt is 11%, the value of the stock is closest to:
Assume that a stock is expected to pay dividends at the end of Year 1 and Year 2 of $1.25 and $1.56, respectively. Dividends are expected to grow at a 5% rate thereafter. Assuming that kt is 11%, the value of the stock is closest to:
Assume that a stock is expected to pay dividends at the end of Year 1 and Year 2 of $1.25 and $1.56, respectively. Dividends are expected to grow at a 5% rate thereafter. Assuming that kt is 11%, the value of the stock is closest to:
A. $22.30.
B. $23.42.
C. $24.55.
Answer: C
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