Cage Creations, Inc. is slowly losing its market share. As a result, the company is decreasing its annual dividend by 10% each year and will cease all dividends after 4 more payments. The next dividend is expected to be $0.9 a share. The required return on the stock is 11 percent. What is the current price of the stock?
A) $1.64
B) $2.25
C) $1.19
D) $3.23
E) $2.18
Correct Answer:
Verified
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