McDonald's Corporation (MCD) is expected to pay a dividend of $9 per share at the...
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Finance
McDonald's Corporation (MCD) is expected to pay a dividend of $9 per share at the end of this year, and it is expected that this dividend will grow at 2% per year for every year after that. The appropriate discount rate rE (i.e., expected return) for MCD is 8%.
a)
What is the price of McDonald's stock?
Group of answer choices
$85.00
$112.50
$120.00
$150.00
B)
What is the expected price of McDonald's stock in one year from now, right after it pays the dividend of 9$?
Group of answer choices
$141.00
$150.00
$153.00
$162.00
C)
An analyst agrees that McDonald's dividend per share should be expected to be $9 at the end of this year and that the appropriate discount rate is rE=8%. However, this analyst suggests that the stock is actually worth $180. What is the dividend growth rate that this analyst perceives for McDonald's stock?
Group of answer choices
3%
4%
5%
6%
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