Using the appropriate dividend discount model the stock is


A company just paid a dividend of $5.00 per share (i.e. T=0). Analysts expect the company will be able to increase dividend payments by 10.0% per annum in perpetuity (or indefinitely). The appropriate cost of equity is 15.0%. Using the appropriate dividend discount model, the stock is valued at __________ per share with a dividend yield of __________.

A) $100.00 ; 5.0%

B) $100.00 ; 5.5%

C) $110.00 ; 4.5%

D) $110.00 ; 5.0%

E) $110.00 ; 5.5%

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Financial Management: Using the appropriate dividend discount model the stock is
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