Discontinue paying dividends permanently

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Reference no: EM13826113

The Red Bud Co. pays a constant dividend of $2.50 a share. The company announced today that it will continue to do this for another 2 years after which time they will discontinue paying dividends permanently. What is one share of this stock worth today if the required rate of return is 8.1 percent?

$4.45

$2.70

$5.00

$2.81

$6.95

Reference no: EM13826113

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