Combined Communications is a new firm in a rapidly growing industry. The company is planning on...

60.1K

Verified Solution

Question

Finance

Combined Communications is a new firm in a rapidly growingindustry. The company is planning on increasing its annual dividendby 24 percent a year for the next 4 years and then decreasing thegrowth rate to 4 percent per year. The company just paid its annualdividend in the amount of $1.10 per share. What is the currentvalue of one share of this stock if the required rate of return is8.50 percent?
A. $41.75
B. $49.58
C. $46.86
D. $35.23
E. $38.82

Answer & Explanation Solved by verified expert

4.3 Ratings (633 Votes)

SEE THE See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

Combined Communications is a new firm in a rapidly growingindustry. The company is planning on increasing its annual dividendby 24 percent a year for the next 4 years and then decreasing thegrowth rate to 4 percent per year. The company just paid its annualdividend in the amount of $1.10 per share. What is the currentvalue of one share of this stock if the required rate of return is8.50 percent?A. $41.75B. $49.58C. $46.86D. $35.23E. $38.82