(ONLY NEED STOCK C ANSWERS)
Consider the following three stocks:
Stock A is expected to provide a dividend of $10.40 a shareforever.
Stock B is expected to pay a dividend of $5.40 next year.Thereafter, dividend growth is expected to be 2.00% a yearforever.
Stock C is expected to pay a dividend of $5.40 next year.Thereafter, dividend growth is expected to be 18.00% a year forfive years (i.e., years 2 through 6) and zero thereafter.
a-1. If the market capitalization rate for each stock is 8.00%,what is the stock price for each of the stocks? (Do not roundintermediate calculations. Round your answers to 2 decimalplaces.)
b-1. If the market capitalization rate for each stock is 5.00%,what is the stock price for each of the stocks? (Do not roundintermediate calculations. Round your answers to 2 decimalplaces.)
