The Value of a Supernormal Growth Firm's Common Stock Is

question 19

Multiple Choice

The value of a supernormal growth firm's common stock is the present value of the

• A) supernormal growth period's expected dividends.
• B) expected stock price at the end of the supernormal growth period.
• C) first year's dividends multiplied by (1 - the supernormal growth rate), divided by the required rate of return.
• D) both a and b