Question

The Sly Fox pays a constant dividend of $1.46 a share. The company announced today that it will continue to pay the dividend for another 2 years and then in Year 3 it will pay a final liquidating dividend of $15.25 a share. What is one share of this stock worth today at a required return of 18.5 percent?

A) $12.92

B) $11.44

C) $12.07

D) $13.09

E) $14.20

Answer

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