Suppose that you estimate D1=$0.72,D2=$0.76,D3=$0.84,and D4=$0.88 for a stock.You also estimate that,beginning at year 4,dividends will grow continually at a rate of 2% per year.If the required return to hold the stock is 14.6%,what is the stock's current price?
A) $6.20
B) $6.25
C) $6.30
D) $6.40
Correct Answer:
Verified
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