What is the maximum amount you would pay for the security


The XYZ Company paid a dividend of Rs. 2 last week. The dividend for XYZ company is expected to be 100% greater next year. The growth rate for the following year is expected to be 50%. In the third year and thereafter, the dividend is expected to grow annually at a rate of 8%. If your requirement is a return of 12%, what is the maximum you would pay for the security?

A) Rs. 159.50

B) Rs. 142.70

C) Rs. 137.50

D) Rs. 140.50

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Accounting Basics: What is the maximum amount you would pay for the security
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