An analyst predicts that a companys dividend at the end of year t+1 will be...
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Accounting
An analyst predicts that a companys dividend at the end of year t+1 will be $10. The analyst further expects that after year t+1 the companys dividends will grow indefinitely at a rate of 2 per cent. The cost of equity is 7 per cent. Under these assumptions, what will be equity value at the end of year t?
a.
$209.35
b.
$111.11
c.
$142.86
d.
$200
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