Midtown Enterprises Paid Its First Annual Dividend Yesterday in the Amount

Midtown Enterprises paid its first annual dividend yesterday in the amount of $.26 a share.The company plans to double each annual dividend payment for the next 3 years.After that,it will pay a constant $2.40 per share dividend indefinitely.What is one share of this stock worth today if the market rate of return on similar securities is 14.5 percent?

A) $10.79
B) $11.40
C) $14.08
D) $12.93
E) $13.66

Correct Answer:

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