In: Finance
Combined Communications is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 24 percent a year for the next 4 years and then decreasing the growth rate to 4 percent per year. The company just paid its annual dividend in the amount of $1.10 per share. What is the current value of one share of this stock if the required rate of return is 8.50 percent?
A. $41.75
B. $49.58
C. $46.86
D. $35.23
E. $38.82