Waterfront Solutions, Inc paid a dividend of $5.00 per share on its common stock yesterday
Dividends are expected to grow at a constant rate of 4% for the next two years, at which point the
stock is expected to sell for $56.00.
If investors require a rate of return on Waterfront's common
stock of 18%, what should the stock sell for today?
A) $44.76 B) $40.22 C) $50.22 D) $48.51
D
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