The Ramirez Company's Last Dividend Was $1

question 33

Multiple Choice

The Ramirez Company's last dividend was $1.75. Its dividend growth rate is expected to be constant at 25% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return (rs) is 12%. What is the best estimate of the current stock price?

• A) $41.58
• B) $42.64
• C) $43.71
• D) $44.80
• E) $45.92

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