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M Final Review Extra Credit x CChegg Study I Guided Sc x C ezt com o.mheducation /hm.tpx R MyLab & rin. M McGraw-Hill Connect Lesson5 Bookmark BMGT 481W BFIN 300 Financial Management FA15: FA15 FINANCE Final Review Extra Credit Question 8 (of 15 8. 1.66 points Welsbro and Sons common stock sells for $54 a share and pays an annual dividend that Increases by 3.2 percent annually. The market rate of return on this stock ls 10.90 percent. What s the amount of the last dividend paid by Welsbro and Sons? O $4.30 O $4.03 O $5.70 O $1.67 O $4.00 Check my work Windows 3 OD Seong Ny Seong Nyeon Kim instructions l help Save & Exit AEOI OneDrive01 7:27 2015-12-06

Explanation / Answer

Stock price = D1÷(r-g)

D1 is next expected dividend

r is required return

g is growth rate

$54 = D0×(1+3.2%)÷(10.9%-3.2%)

Last dividend paid, D0 = $4.03

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