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What is a share in Moxon worth

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Question - Moxon Investments does not expect to pay a dividend until the end of the 5th year, at which time it plans to pay a dividend of $1.50 per share. The dividends in years 6 and 7 are expected to be $2.00 and $2.50, respectively. From year 8 onwards, the firm is expected to pay a dividend of $3.50 per share, in perpetuity. What is a share in Moxon worth, if the company's shareholders expect to earn 9% p.a.?

a. $5.90

b. $24.81

c. $23.05

d. $42.42

e. None of the other answers is correct

Reference no: EM132533614

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