A stock is expected to pay its first $0.8 dividend in 2 years from now (t=2). The dividend is expected to be paid annually forever and grow by 0% pa. The discount rate is 7% pa. Estimate what the stock price will be in 3.25 years from now. The stock price at time 3.25 is expected to be: Select one: а. $14.2393 b. $12.4372 С. $11.6235 d. $11.4286 е. $10.8631 Clear my choice

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A stock is expected to pay its first $0.8
dividend in 2 years from now (t=2). The
dividend is expected to be paid annually
forever and grow by 0% pa. The discount rate
is 7% pa. Estimate what the stock price will be
in 3.25 years from now. The stock price at
time 3.25 is expected to be:
Select one:
а.
$14.2393
b.
$12.4372
C.
$11.6235
d.
$11.4286
е.
$10.8631
Clear my choice
Transcribed Image Text:A stock is expected to pay its first $0.8 dividend in 2 years from now (t=2). The dividend is expected to be paid annually forever and grow by 0% pa. The discount rate is 7% pa. Estimate what the stock price will be in 3.25 years from now. The stock price at time 3.25 is expected to be: Select one: а. $14.2393 b. $12.4372 C. $11.6235 d. $11.4286 е. $10.8631 Clear my choice
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