Joven Novelty Products Inc. has decided that its dividend policy should reflect company growth. They...
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Joven Novelty Products Inc. has decided that its dividend policy should reflect company growth. They indicate that the first annual dividend they intend to pay will be $2.50 per share 3 years from today. Yearly dividends with then increase at a rate of 6% per year until the end of the 8th year from now and then grow at 3.5% per year therafter. What share price should you pay for such a stock if you expect an effective annual return of 15% per year?
A) $28.12
B) $19.84
C) $17.96
D) None of the above
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