Bill Bailey and Sons pays no dividend at the present time. The company plans to start paying an annual dividend in the amount of $.30 a share for two years commencing two years from today. After that time,the company plans on paying a constant $1 a share dividend indefinitely. Given a required return of 14%,what is the value of this stock?
A) $4.82
B) $5.25
C) $5.39
D) $5.46
E) $5.58
Correct Answer:
Verified
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