DMX Corporation pays a constant dividend of $10 per share, but the dividend will be paid for onlyeight more years. In a world with a required return on this sort of investment of 8%, what is the presentvalue of this stock? What is the stock price? What is the value of this eight-year annuity? [All three ofthese questions have the same answer!]O $57.47O $73.60$60.00O $51.20O $53.35

Constant dividend (D) = $10 Duration of dividend (n) = 8 years Required return (r) = 8%

Answered: DMX Corporation pays a constant…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 17P

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