1 answer

Knightmare, Inc., will pay a dividend of $5.15, $8.05, and $11.25 per share for each of...

Question:

Knightmare, Inc., will pay a dividend of $5.15, $8.05, and $11.25 per share for each of the next three years, respectively. The company will then close its doors. Investors require a return of 11 percent on the company's stock. What is the current stock price?


Answers

Required return = 11% D, = 5.15 D2 = 8.05 3 = 1.25 5-15 0.05 11025 Current stock price 5.15 ii। 8.05 (111)2 ।। 25 (11)3 8.23

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