WHAT IS THE VALUE OF THE COMMON STOCKS? IF THE COMMON STOCK HAS AN ANNUAL DIVIDEND OF $200 PER SHARE, AND THE REQUIRED RETURN ON COMMON STOCK IS 8% AND ASSUME TO GROW AT A CONSTANT RATE OF 4% IN DIVIDENDS

WHAT IS THE VALUE OF THE COMMON STOCKS? IF THE COMMON STOCK HAS AN ANNUAL DIVIDEND OF $200 PER SHARE, AND THE REQUIRED RETURN ON COMMON STOCK IS 8% AND ASSUME TO GROW AT A CONSTANT RATE OF 4% IN DIVIDENDS

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter9: The Cost Of Capital

Section: Chapter Questions

Problem 5P

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Question

WHAT IS THE VALUE OF THE COMMON STOCKS?

IF THE COMMON STOCK HAS AN ANNUAL DIVIDEND OF $200 PER SHARE, AND THE REQUIRED RETURN ON COMMON STOCK IS 8% AND ASSUME TO GROW AT A CONSTANT RATE OF 4% IN DIVIDENDS

Group of choices:

A. $3,633.33

B. $3030.33

C. $3,3333.33

D. $3,300.33

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