Log in
Finance
1
answer
0
watching
245
views

The Red Bud Co. pays a constant dividend of $2.50 a share. The company announced today that it will continue to do this for another 2 years after which time they will discontinue paying dividends permanently. What is one share of this stock worth today if the required rate of return is 8.1 percent?

$4.45

$2.70

$5.00

$2.81

$6.95

Watch
1
answer
0
watching
245
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Irving Heathcote
Irving HeathcoteLv2
28 Sep 2019

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related questions

Diets For You announced today that it will begin paying annual dividends next year. The first dividend will be $0.12 a share. The following dividends will be $0.15, $0.20, $0.50, and $0.75 a share annually for the following 4 years, respectively. After that, dividends are projected to increase by 4 percent per year. How much are you willing to pay to buy one share of this stock today if your desired rate of return is 8.5 percent?

Diets For You announced today that it will begin paying annualdividends next year. The first dividend will be $1.25 a share. Thefollowing dividends will be $0.25, $0.25, $0.50, and $0.75 a shareannually for the following 4 years, respectively. At the end of thefifth year, the stock could be sold for $18. How much are youwilling to pay to buy one share of this stock today if your desiredrate of return is 8.5 percent?

Please show work

Plutinum Corp. pays a constant $31 dividend on its stock. The company will maintain the dividend for the next ten years and will then cease paying dividends forever. if the required return on this stock is 13 percent, what is the current share price?

Weekly leaderboard

Home
Homework Help 3,900,000
Finance 370,000
Start filling in the gaps now
Log in