6. A firm is currently experiencing troublesome times. The last dividend paid was $2, but...
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6. A firm is currently experiencing troublesome times. The last dividend paid was $2, but this is expected to decline at a rate of 6% per year. If investors require 10%, what is the current price of the stock? a. $10.38 c. $12.50 b. $11.75 d. $18.80 7. What is the fair value of the stock for which no dividend will be paid for next six years, but $1.00 dividend per share will be paid 7 years from now and then will grow at 3% every year? Assume that the discount rate for the stock is 10%. a. $8.07 c. $19.89 b. $10.74 d. $23.54
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