Arcs and triangles paid an annual dividend of $1.47 a share last month. the company is planning on paying $1.52, $1.58, and $1.60 a share over the next three years, respectively. after that, the dividend will be constant at $1.65 per share per year. what is the market price of this stock if the market rate of return is 12 percent?

Market price of the stock  = $13.54

Explanation:

given data

annual dividend D = $1.47

planning on paying P1 = $1.52

planning on paying P2 = $1.58

planning on paying P3 = $1.60

constant dividend D1 = $1.65

market rate of return r = 12 percent

to find out

market price of this stock

solution

we get here Market price of the stock  that is express as

Market price of the stock  = PV(Dividends) + PV(Horizon Value)

Market price of the stock  =   ................1

put here value we get

Market price of the stock  =

Market price of the stock  = $13.5425

answer; ///i believe that the correct answer is (a) it is the means by which a person earns money;

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