ZZR Corp. just paid a dividend of $1.25 and expects to have it grow at 10%...

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ZZR Corp. just paid a dividend of $1.25 and expects to have it grow at 10%...

ZZR Corp. just paid a dividend of $1.25 and expects to have it grow at 10% for the 5 coming years and then growing at 3% indefinitely thereafter. If stocks of similar risk earn 12% effective annual return, what should be the stock price of ZZR Corp.:

Question 4 options:

	$11.80
	$5.38
	$20.94
	$19.00

business finance

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Answer 1

Answer #1

Year Calculations 0 Dividend $1.2500 $1.3750 1 =1.25*1.1 2 =1.375*1.1 3=1.5125*1.1 4 =1.6638*1.10 5 =$1.18302*1.10 6 =$2.01*1

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Answer 2

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