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Leslie Owns 1,200 Shares of Good Manners Stock

Question 54

Multiple Choice

Leslie owns 1,200 shares of Good Manners stock.Good Manners will pay a $1.12 per share dividend one year from now and a $1.32 per share dividend two years from now.Leslie does not want any dividend this year but does want as much dividend income as possible next year.Her required return on this stock is 10 percent and she plans on creating her own homemade dividends.Ignoring taxes,what will her homemade dividend per share be next year?


A) $2.420
B) $2.448
C) $2.426
D) $2.552
E) $2.561

Correct Answer:

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