What is the value of this stock today at a discount rate

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Reference no: EM13913107

Newcomer Mills is a relatively new firm which will retain all of its earnings for the next four years. Four years from now, the firm expects to pay its first dividend of $0.25 a share. After that, it intends to increase the dividend by 4 percent annually. What is the value of this stock today at a discount rate of 12 percent?

A. $1.53

B. $1.78

C. $2.04

D. $2.22

E. $2.60

Reference no: EM13913107

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