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28 Sep 2019
Sander's Supplies has paid a constant dividend of $2.15 a share for the past 20 years. Yesterday, the firm announced that the dividend will increase next year by 5 percent and will stay at the level for three years, after which time the dividends will increase by 4 percent annually. The required return on this stock is 9 percent. What is the current value per share? Show your calculations.
A)$43.49
B)$56.42
C)$54.07
D)$41.97
E)$48.82
Sander's Supplies has paid a constant dividend of $2.15 a share for the past 20 years. Yesterday, the firm announced that the dividend will increase next year by 5 percent and will stay at the level for three years, after which time the dividends will increase by 4 percent annually. The required return on this stock is 9 percent. What is the current value per share? Show your calculations.
A)$43.49
B)$56.42
C)$54.07
D)$41.97
E)$48.82
Elin HesselLv2
28 Sep 2019
