Great Lakes Christmas Tree Co. expects to pay an annual dividend of P2 per share in perpetuity on its preferred shares starting one year from now. The firm is committed solely to its steady North American Christmas tree business (as opposed to, say, diversifying into landscape shrubbery). This profile warrants a required return of 6%. What is the present value of this dividend stream for investors? a.P12.00 b.P1.89 c.P33.33 d.P2.12
Great Lakes Christmas Tree Co. expects to pay an annual dividend of P2 per share in perpetuity on its preferred shares starting one year from now. The firm is committed solely to its steady North American Christmas tree business (as opposed to, say, diversifying into landscape shrubbery). This profile warrants a required return of 6%. What is the present value of this dividend stream for investors? a.P12.00 b.P1.89 c.P33.33 d.P2.12
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
Section: Chapter Questions
Problem 1PS
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7. Great Lakes Christmas Tree Co. expects to pay an annual dividend of P2 per share in perpetuity on its
a.P12.00
b.P1.89
c.P33.33
d.P2.12
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