Goodie Corporation produces goods that are very mature in their product life cycles.Goodie Corporation is expected to have per share FCFE in year 1 of $2.00, per share FCFE of $1.50 in year 2, and per share FCFE of $1.00 in year 3.After year 3, per share FCFE is expected to decline at a rate of 1% per year.An appropriate required rate of return for the stock is 10%.The stock should be worth
A) $9.00.
B) $101.57.
C) $10.57.
D) $22.22.
E) $47.23.
Correct Answer:
Verified
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