单选题
A firm is expected to have four years of growth with a retention ratio of 100 percent. Afterwards the firm's dividends are expected to grow 4 percent annually, and the dividend payout ratio will be set at 50 percent. If earnings per share (EPS)=$2.4 in year 5 and the required return on equity is 10 percent, what is the stock's value today? A. $20.00. B. $30.00. C. $13.66.
【正确答案】
C
【答案解析】Dividend in year 5 = (EPS) ( payout ratio) =2.4×0.5=1.2 P4=1.2/(0.1-0.04)=1.2/0.06=$20 P0=PV/(P4)=$20/(1.10)4=$13.66