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Galloway, Inc., just paid a dividend of $3 per share and has announced that it will increase its dividend by $1 per share for each of the next 4 years, and then never pay another dividend. What is the current per share value at a required return of 12.7 percent?

(A) $20.08
(B) $21.15
(C) $16.02
(D) $18.60
(E) $17.33

Respuesta :

sakhilemdletshesm

Answer:

(C) $16.02

Explanation:

Current per share value at required return of 12.7 percent

=($4/(1+0.127))+($5/(1+0.127)2 )+($6/(1+0.127)3)+($7/(1+0.127)4

=$ 16.02 ((C) $16.02)