Weston Hotels pays no dividend at the present time. Starting in Year 3, the firm will pay a dividend of $.35 per share for two years. After that, the company plans on paying a constant $.85 per share annual dividend indefinitely. How much should you pay per share to purchase this stock today at a required return of 14.8 percent? O $3.78 O $3.56 $4.37 $4.61 None of these answers are correct

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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Weston Hotels pays no dividend at the present time. Starting in Year 3,
the firm will pay a dividend of $.35 per share for two years. After that,
the company plans on paying a constant $.85 per share annual dividend
indefinitely. How much should you pay per share to purchase this stock
today at a required return of 14.8 percent?
$3.78
$3.56
$4.37
$4.61
O None of these answers are correct
Transcribed Image Text:Weston Hotels pays no dividend at the present time. Starting in Year 3, the firm will pay a dividend of $.35 per share for two years. After that, the company plans on paying a constant $.85 per share annual dividend indefinitely. How much should you pay per share to purchase this stock today at a required return of 14.8 percent? $3.78 $3.56 $4.37 $4.61 O None of these answers are correct
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