Explore BrainMass
Share

Explore BrainMass

    Question about Expected year-end dividend

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Francis Inc.'s stock has a required rate of return of 10.25% and it sells for $57.50 per share. The dividend is expected to grow at a constant rate of 6.00% per year. What is the expected year-end dividend, D1?

    a) $2.20
    b) $3.25
    c) $2.69
    d) $2.44
    e) $2.96

    © BrainMass Inc. brainmass.com October 10, 2019, 1:32 am ad1c9bdddf
    https://brainmass.com/economics/barriers-to-growth/question-about-expected-year-end-dividend-338772

    Solution Preview

    Using the Discounted dividend model, we know that p = d/(r-g) where p is ...

    Solution Summary

    Expected Year-End Dividend

    $2.19