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Sonic Inc. has encountered financial difficulties. The company projects that it will have enough cash...

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Finance

Sonic Inc. has encountered financial difficulties. The company projects that it will have enough cash flow to continue paying its current dividend for 5 more years before it must stop paying a dividend altogether. The company just paid a dividend of $14.26, and it will continue to pay the same dividend for the next 5 years. After that, the company will never pay another dividend. What is the value of the stock if the discount rate is 12%?
a. $118.83
b. $51.40
c. $71.30
d. $40.46
e. $55.44

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