A7X Corp. just paid a dividend of $1.55 per share. The dividends are expected to grow at 35 percent for the next 7 years and then level off to a growth rate of 6 percent indefinitely.
If the required return is 15 percent, what is the price of the stock today?
a. $2.02
b. $56.08
c. $77.77
d. $79.32
E. $76.21
The price of a stock is the present value of its future dividends.
The price of the stock today is $77.77
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