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Bednars Bed & Breakfasts, Incorporated currently pays a $3.10 common stock dividend. Dividends have been...

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Finance

Bednars Bed & Breakfasts, Incorporated currently pays a $3.10 common stock dividend. Dividends have been recently growing at a 15% annual rate and are expected to continue growing at this rate for the next 2 years. Then dividends are expected to continue growing at a 10% rate for another 2 years (years 3 and 4) and thereafter the growth rate is expected to be 5% for the foreseeable future. What is the current value of Caseys common stock to an investor requiring an 13% rate of return?

a. $27.42

b. $52.47

c. $44.56

d. $47.87

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