Mountain View Nursery Is a Relatively Young Firm Which Just

question 72

Multiple Choice

Mountain View Nursery is a relatively young firm which just paid its first annual dividend of $.35 a share. Management projects dividend increases of 12 percent per year for 5 years followed by a constant growth rate of 3 percent annually. What is this stock worth today if the applicable discount rate is 11 percent?

• A)$3.59
• B)$4.66
• C)$5.23
• D)$6.01
• E)$6.51

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