Bill bailey and sons pays no dividend at the present time


Bill Bailey and Sons pays no dividend at the present time. The company plans to start paying an annual dividend in the amount of $.30 a share for two years commencing two years from today. After that time, the company plans on paying a constant $1 a share dividend indefinitely. Given a required return of 14%, what is the value of this stock?

a. $4.82

b. $5.25

c. $5.39

d. $5.46

e. $5.58

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Financial Management: Bill bailey and sons pays no dividend at the present time
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