The Last Dividend Paid by Abbot Labs Was $1

question 162

Multiple Choice

The last dividend paid by Abbot Labs was $1.00. Abbot's growth rate is expected to be a constant 8% for three years, after which the growth rate is expected to be 10%. Investors require a return of 16% on stocks like Abbot. What should the price of Abbot's stock be?

• A)$15.36
• B)$16.36
• C)$17.00
• D)$17.40
• E)$18.40

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