Last week,Railway Cabooses paid its annual dividend of $1.20 a share.The company has been reducing its dividends by 6 percent each year.What is one share of stock worth at a required return of 14 percent?

Name: Last week,Railway Cabooses paid its annual dividend of $1.20 a share.The company has been reducing its dividends by 6 percent each year.What is one share of stock worth at a required return of 14 percent?
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P₀ = {$1.20 × [1 + (-.06)]}/[.14 - (-.06)] = $5.64

Last Week,Railway Cabooses Paid Its Annual Dividend of $1