Bc 'n d just paid its annual dividend of $.60 a share. the projected dividends for the next five years are $.30, $.50, $.75, $1.00, and $1.20, respectively. after that time, the dividends will be held constant at $1.40 per share. what is this stock worth today at a discount rate of 14 percent

$7.60

Explanation:

Find PV dividend per year at 14% discount rate;

0.30 / 1.14 = 0.2632

0.50 / 1.14² = 0.3847

0.75 / 1.14³ = 0.5062

1 / (1.14^4) = 0.5921

1.20 / (1.14^5) = 0.6232

Find the PV of the terminal cashflow;

Next, sum up the PVs to find the price of the stock today;

Price = 0.2632 + 0.3847 + 0.5062 + 0.5921 + 0.6232 + 5.2308

= $7.60

client registration system, resource management system, clinical management system, patient information database, common use-system interface

explanation:

answer; capital structure decision;