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LKS Ltd last paid a dividend of $0.20 three years ago. Today the company announced...

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Accounting

LKS Ltd last paid a dividend of $0.20 three years ago. Today the company announced they will resume paying dividends. The planned dividends are $0.50 in one year's time, $0.60 in two years' time, and thereafter dividends will increase by a constant rate of 5% p.a. indefinitely. If the required rate of return for LKS is 14%, what is a fair price for one share today? a. $6.67 b. $6.49 c. $5.85 d. $0.44 e. $6.29

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