Commence paying annual dividends


Coats & More just announced that it will commence paying annual dividends next year. It plans to pay $.75 year for four years, $.90 a year for following three years, and then cease paying dividends altogether. How much is one share of this stock worth to you today if you require a 12 percent rate of return? Show your calculations.

A) $4.40

B) $5.89

C) $3.34

D) $4.09

E) $3.65

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Finance Basics: Commence paying annual dividends
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