Metal Corp.just paid $1 dividends and is assumed to grow at 5% per year. The required return of the company is 15%.

Metal Corp.just paid $1 dividends and is assumed to grow at 5% per year. The required return of the company is 15%. The present value of the first 50 dividend payments is $10.39. What is the present value of all the dividend payments from year 51 to infinity assuming the required return and the growth rate stay constant?

None of the answers is correct
$.11
$.89
$10.39
$10.50

Expert Solution

jeff jeffy answered 2 years ago

Metal Corp. just paid $1 dividends and is assumed to grow at 7% per year. The required return of the company is 15%.

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