QUESTION 17 Better Plastics is a mature manufacturing firm. The companyjust paid a $4 annual dividend...

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business finance

Answer 1

Answer #1

Current Dividend, D0 = $ 4

Return on stock , k = 0.12

Annual growth rate in dividend, g = - 0.03

Price of the stock today = D0*(1+g)/ (k-g) = 4*(1-0.03)/(0.12-(-0.03)) = $ 25.87

Answer is E) $ 25.87

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Answer 2

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