Mahenterin Inc. is expecting to pay $1.23, $0.99, and $1.13 in annual dividends for the next three years respectively. After that, it projects that dividends will increase by 1.5% annually. Andy is in the 25% marginal tax bracket and wants to earn 6% after-tax on his investments. How much is Andy willing to pay today for one share of Mahenterin Inc. stock?
A) $16.90
B) $17.04
C) $17.31
D) $17.36
E) $17.81
Correct Answer:
Verified
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