A Fast Growing Firm Recently Paid a Dividend of $0

question 23

Multiple Choice

A fast growing firm recently paid a dividend of $0.80 per share. The dividend is expected to increase at a rate of 30 percent for the next four years. Afterwards, a more stable 7 percent growth rate can be assumed. If a 10 percent discount rate is appropriate for this stock, what is its value?

• A) $60.48
• B) $60.18
• C) $61.34
• D) $73.86

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Definitions:

Transformational Leadership

A style of leadership where the leader works with teams to identify needed change, creating a vision to guide the change through inspiration and executing the change in tandem with committed members of the group.

Consciousness

The state of being aware of and able to think about one's own existence, sensations, thoughts, and environment.

Creative Deployment

The strategic and innovative utilization of resources, ideas, or personnel to achieve specific goals or solve problems in novel ways.

Positive Self-Regard

Describes an individual's overall subjective emotional evaluation of their own worth, characterized by attitudes of respect and acceptance towards oneself.