A company currently pays a dividend of $4.00 per share.It expects the growth rate of the dividend to be 3% (0.03) annually.If the interest rate is 6% (0.06) what does the dividend-discount model predict the current price of the stock should be?
A) $103.33
B) It doesn't, you need an expected future selling price to use the model
C) $137.33
D) $66.67
Correct Answer:
Verified
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