What is the current value of a share of drone

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Question - Drone, Inc currently pays $3.50 dividend per share. Next years dividend is expected to be $4 per share. After next year, dividends are expected to increase at a 5 percent annual rate for three years and a 4 percent annual rate thereafter.

What is the current value of a share of drone, Inc stock to an investor who requires a 12 percent return on his or her investment. Calculate all values as if you are in DO, or year 0.

a. $49.87

b. $54.30

c. $51.01

d. $50.3031

Reference no: EM132787698

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