Blockbuster Inc.just paid a dividend of $2 per share.Dividends are expected to grow at a rate of -50% annually over the next three years.After that,it is expected that Blockbuster will cease paying dividends forever.What is the fair market price for a share of Blockbuster if shareholders require a return of 12%?
A) $0
B) $1.47
C) $1.61
D) $2.21
E) $2.95
Correct Answer:
Verified
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