Discraft Inc

question 80

Multiple Choice

Discraft Inc.is expected to pay an annual dividend of $1 at the end of the current year.(Discraft pays its dividends annually.) The dividend is expected to grow quickly over the ensuing year at the rate of 20%.Starting two years from today the growth rate of dividends will fall to a rate of 3% and continue at that rate in perpetuity.Investors require a 12% return on the stock.Estimate the market price of the shares of Discraft in one year's time (at Year 1) just after the next dividend is paid.

• A) $11.24
• B) $11.62
• C) $12.80
• D) $13.33
• E) $14.82

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Definitions:

Self-concept

An individual’s understanding and evaluation of their own behaviors, abilities, and unique characteristics.

Middle Childhood

A developmental stage that typically includes children from about 6 to 12 years old, characterized by significant growth in social, cognitive, and emotional areas.

Cognitive Development

The process by which individuals acquire and develop the ability to think, understand, learn, and remember, reflecting changes in mental capabilities throughout the lifespan.

Social Awareness

The ability to understand and empathize with the perspectives and emotions of others.