Best estimate of the stocks current market value

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Reference no: EM131047530

Acme Corporation just paid a dividend of D 1 = $1.72. Analysts expect the company's dividend to grow by 10% between year 1 and 2, and at a constant rate of 5% from year 2 to 3 and continue with the 5% thereafter. The required return on this low-risk stock is 9.00%. What is the best estimate of the stocks current market value?

a. $41.59

b. $42.65

c. $43.75

d. $44.97

e. $45.99

Reference no: EM131047530

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