Exhibit 11.8 Use the Information Below for the Following Problem(S)

question 87

Multiple Choice

Exhibit 11.8
Use the Information Below for the Following Problem(S)
Fast Grow Corporation is expecting dividends to grow at a 20% rate for the next two years. The corporation just paid a $2 dividend and the next dividend will be paid one year from now. After two years of rapid growth dividends are expected to grow at a constant rate of 9% forever.
-Refer to Exhibit 11.8.If the required return is 14%,what is the value of Fast Grow Corporation common stock today?

• A) $40.26
• B) $42.38
• C) $46.70
• D) $52.63
• E) $62.78

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Definitions:

Horizontal Exchanges

refer to marketplaces or platforms that facilitate the trading, sharing, or selling of goods, services, or information between entities within the same industry or sector.

Many Industries

This refers to the broad range of sectors and fields within the economy, encompassing various types of businesses and production methods.

Vertical Exchanges

Online marketplaces connecting buyers and sellers within specific industries or sectors, facilitating more specialized transactions than traditional horizontal marketplaces.

Given Industry

Refers to a specific sector or market within the economy that is identified by its particular products, services, or business activities.