Combined Communications is a new firm in a rapidly growing industry. The company
ID: 2708291 • Letter: C
Question
Combined Communications is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 23 percent a year for the next 4 years and then decreasing the growth rate to 5 percent per year. The company just paid its annual dividend in the amount of $1.20 per share. What is the current value of one share of this stock if the required rate of return is 8.25 percent?
$57.14
$60.31
?
$71.30
$53.24
$65.86
$57.14
$60.31
?
$71.30
$53.24
$65.86
Combined Communications is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 23 percent a year for the next 4 years and then decreasing the growth rate to 5 percent per year. The company just paid its annual dividend in the amount of $1.20 per share. What is the current value of one share of this stock if the required rate of return is 8.25 percent?Explanation / Answer
correct answer is b $60.31