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xenn [34]
3 years ago
12

Toy Mart recently announced that it will pay annual dividends at the end of the next two years of $1.60 and $1.10 per share, res

pectively. Then, in Year 5 it plans to pay a final dividend of $13.50 a share before closing its doors permanently. At a required return of 13.5 percent, what should this stock sell for today
Business
1 answer:
Delicious77 [7]3 years ago
6 0

Answer:

$9.43

Explanation:

Calculation for what should this stock sell for today

Stock today = $1.60/1.135 + $1.10/1.135^2 + $13.50/1.135^5

Stock today = $9.43

Therefore what should this stock sell for today is $9.43

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