Bubble.com Inc.currently pays no dividends.You overhear the CFO tell the CEO that the plan is to begin paying annual dividends in 5 years.The first dividend will be $2 and dividends are expected to grow at 5% in perpetuity thereafter.Given a required return of 11%,what should the price of the stock be today?
A) $19.78
B) $20.77
C) $21.96
D) $24.24
E) $24.37
Correct Answer:
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