A stock just paid an annual dividend of $0.40 a share. Dividends are expected to grow at 15 percent for the next 3 years and then grow at 3.5percent indefinitely. If the required return is 12 percent, what is the price of the stock today?
A) $5.64
B) $8.12
C) $7.38
D) $6.54
E) $9.14
Correct Answer:
Verified
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