Assume a stock has dividend growth of 10% for the next 2 years. Then its...
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Assume a stock has dividend growth of 10% for the next 2 years. Then its growth declines to 2.5%. If the last dividend is 45p and the required return is 20%, which of the following statements is correct? (Prices in the statements are rounded to the nearest hundredth.)
| Today's price of the stock is 3.01. | ||
| Today's price of the stock is 3.19. | ||
| The price of the stock in two years time is 3.01. | ||
| The price of the stock in two years time is 2.21. | ||
| None of the above. |
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