What should the stock sell for today

Reference no: EM13283989

Modem Development, 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 Modem's common stock of 18%, what should the stock sell for today?

A) $40.22
B) $48.51
C) $44.76
D) $50.22

Reference no: EM13283989

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