LCP, a Newly Formed Medical Group, Is Currently Paying Dividends

question 61

Multiple Choice

LCP, a newly formed medical group, is currently paying dividends of $.50. These dividends are expected to grow at a 20% rate for the next 5 years and at a 3% rate thereafter. What is the value of the stock if the appropriate discount rate is 12%?

• A) $8.08.
• B) $11.17.
• C) $14.22.
• D) $17.32.
• E) $30.90.

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Definitions:

Robbed

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The tendency to overemphasize internal characteristics and underestimate external factors when explaining others' behaviors.

Internal Characteristics

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A condition in which a person suffers from a sense of powerlessness, arising from a traumatic event or persistent failure to succeed.