Assume the stock for Mo - Money Inc. is expected to pay a $10 dividend for each of the next 3 years while this company develops new products, Starting 4 years from today, the dividend is expected increase by 4% and grow at that yearly rate thereafter. If the annual equity opportunity cost of capital for Mo - Money is 14%, what should the current price of one share of this stock be? Enter your estimate as a positive number stated to the nearest penny li.e., round to two decimal places). Do not enter any commas.
Assume the stock for Mo - Money Inc. is expected to pay a $10 dividend for each of the next 3 years while this company develops new products, Starting 4 years from today, the dividend is expected increase by 4% and grow at that yearly rate thereafter. If the annual equity opportunity cost of capital for Mo - Money is 14%, what should the current price of one share of this stock be? Enter your estimate as a positive number stated to the nearest penny li.e., round to two decimal places). Do not enter any commas.
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 16P
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