Pays no dividend at the present time

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Reference no: EM13878372

Bill Bailey and Sons pays no dividend at the present time. The company plans to start paying an annual dividend in the amount of $.30 a share for two years commencing two years from today. After that time, the company plans on paying a constant $1 a share dividend indefinitely. Given a required return of 14%, what is the value of this stock?

a. $4.82

b. $5.25

c. $5.39

d. $5.46

e. $5.58

Reference no: EM13878372

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