Miller Juice
Miller Juice is a young company that currently does not pay a dividend. The company retains all their earnings to finance their growth. However, ten years from now the company is expected to start paying a $1.50 dividend. According to research reports the dividend should then grow by 5% annually forever.
-If the required return on the stock investment is 13%, what should be Miller's stock price today?
A) $19.69
B) $6.24
C) $15.62
D) $10.37
Correct Answer:
Verified
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