Beatrice Markets is expecting a period of intense growth and has decided to retain more of its earnings to help finance that growth.As a result,it is going to reduce its annual dividend by 30 percent a year for the next 2 years.After that,it will maintain a constant dividend of $2.50 a share.Last year,the company paid $3.60 as the annual dividend per share.What is the market value of this stock if the required rate of return is 14.5 percent?
A)$14.63
B)$16.70
C)$18.08
D)$19.61
E)$21.23

Question

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The Answer of Beatrice Markets is expecting a period of intense growth and has decided to retain more of its earnings to help finance that growth.As a result,it is going to reduce its annual dividend by 30 percent a year for the next 2 years.After that,it will maintain a constant dividend of $2.50 a share.Last year,the company paid $3.60 as the annual dividend per share.What is the market value of this stock if the required rate of return is 14.5 percent?
A)$14.63
B)$16.70
C)$18.08
D)$19.61
E)$21.23

Beatrice Markets Is Expecting a Period of Intense Growth and Has