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An analyst predicts that a companys dividend at the end of year t+1 will be...

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Accounting

An analyst predicts that a companys dividend at the end of year t+1 will be $10. The analyst further expects that after year t+1 the companys dividends will grow indefinitely at a rate of 2 per cent. The cost of equity is 7 per cent. Under these assumptions, what will be equity value at the end of year t?

a.

$209.35

b.

$111.11

c.

$142.86

d.

$200

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