CX Enterprises has the following expected dividends: $1.00 in one year, $1.15 in two years, and $1.25 in three years. After that, its dividends are expected to grow at 4% per year forever (so that year 4's dividend will be 4% more than 1.25 and so on). If CX's equity cost of capital is 12%, what is the current price of its stock? The price of the stock will be $__________________ (Round to the nearest cent.)

CX Enterprises has the following expected dividends: $1.00 in one year, $1.15 in two years, and $1.25 in three years. After that, its dividends are expected to grow at 4% per year forever (so that year 4's dividend will be 4% more than 1.25 and so on). If CX's equity cost of capital is 12%, what is the current price of its stock? The price of the stock will be $__________________ (Round to the nearest cent.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 12P

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