Sedge Inc Has a 12% Required Rate of Return

question 18

Multiple Choice

Sedge Inc. has a 12% required rate of return. It does not expect to pay dividends for seven years. At the end of year 8, it will pay $2.00 per share in dividends. At that time, Sedgwick expects its
Dividends to grow at 7% forever. Calculate the stock price now.

• A) $44.80
• B) $33.40
• C) $31.20
• D) $30.00
• E) $29.80

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Definitions:

Organizational Effectiveness

The degree to which an organization achieves its goals and objectives efficiently and effectively.

Leadership Competency Approach

A method in leadership development focusing on identifying and cultivating a set of specific skills, behaviors, and attitudes that contribute to effective leadership.

Senior Executives

Top-level managers or leaders of an organization, responsible for strategic decision-making and overall company direction.

Task-oriented Leadership

A leadership style that focuses primarily on the tasks that need to be performed in order to achieve certain goals or standards.