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A common stock just paid a dividend (D0) of $3.35 per share. Dividends are expected to rise at the rate of 10% per year forever. If the interest rate on this stock is 14% per year, what will the price
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A common stock just paid a dividend (D0) of $3.35 per share. Dividends are expected to rise at the rate of 10% per year forever. If the interest rate on this stock is 14% per year, what will the price of this stock be in Year 36?

A. $0.28
B. $12.56
C. $77.96
D. $388.26
E. $1,404.64

User Muradin
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1 Answer

3 votes
It’s D. $388.26 I think.
User Shawnhcorey
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