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The Red Bud Co. pays a constant dividend of $2.40 a share. The company announced today that it will continue to do this for another 2 years after which time they will discontinue paying dividends permanently.
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The Red Bud Co. pays a constant dividend of $2.40 a share. The company announced today that it will continue to do this for another 2 years after which time they will discontinue paying dividends permanently. What is one share of this stock worth today if the required rate of return is 8.0 percent

User Sharpshadow
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3 votes

Answer:

$4.44

Step-by-step explanation:

P0 = $2.40 / 1.08+ $2.40 / 1.08 = $4. 44

User Sachin Bhankhar
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