A company plans to decrease its annual dividend by 4% a year over the next four years. The company then will pay a constant dividend of $1 per share. Company's last year’s dividend per share is $1.8.
If the required rate of return is 12%, what is the price that one is willing to pay for the company's stock?
Here are the MC Options:
$12.07
$10.27
$13.10
$9.29
$11.30