Nu-Tek,Inc.is expecting a period of intense growth and has decided to retain more of its earnings to help finance that growth.As a result it is going to reduce its annual dividend by 10% a year for the next three years.After that,it will maintain a constant dividend of €.70 a share.Last month,the company paid €1.80 per share.What is the value of this equity if the required rate of return is 13%?
A)€6.79
B)€7.22
C)€8.22
D)€8.87
E)€9.01

Question

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The Answer of Nu-Tek,Inc.is expecting a period of intense growth and has decided to retain more of its earnings to help finance that growth.As a result it is going to reduce its annual dividend by 10% a year for the next three years.After that,it will maintain a constant dividend of €.70 a share.Last month,the company paid €1.80 per share.What is the value of this equity if the required rate of return is 13%?
A)€6.79
B)€7.22
C)€8.22
D)€8.87
E)€9.01