Chapter 4 The Value of Common Stocks

30. Parcel Corporation is expected to pay a dividend of $5 per share next year, and the dividends pay out ratio is 50%. If the dividends are expected to grow at a constant rate of 8% forever and the required rate of return on the stock is 13%, calculate the present value of the growth opportunity. A) $23.08 . B) $64.10 . C) $100 . D) None of ... ................
................