ABC Common Stock Is Expected to Have Extraordinary Growth of 20

question 96

Multiple Choice

ABC common stock is expected to have extraordinary growth of 20 percent per year for two years, at which time the growth rate will settle into a constant 6 percent.If the discount rate is 15 percent and the most recent dividend was $2.50, what should be the current share price?

• A)$31.16
• B)$33.23
• C)$37.42
• D)$47.77 P_o =

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Premises

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