Variable Growth a Fast Growing Firm Recently Paid a Dividend

question 99

Multiple Choice

Variable Growth A fast growing firm recently paid a dividend of $0.50 per share.The dividend is expected to increase at a 25 percent rate for the next 3 years.Afterwards,a more stable 12 percent growth rate can be assumed.If a 15 percent discount rate is appropriate for this stock,what is its value?

• A)$5.00
• B)$22.62
• C)$25.75
• D)$36.46

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Definitions:

Ego

In psychoanalytic theory, a component of the personality that is responsible for dealing with reality while working to satisfy the demands of both the id and the superego, in a more general sense, often used to refer to a sense of self-esteem or self-importance.

Philosophical Behaviorism

A theory in philosophy of mind that asserts thoughts, feelings, and intentions can be fully described by observable behaviors and physical processes, without reference to inner mental states.

Sensations

Immediate physical experiences or perceptions through the senses.

Functionalists

Scholars or theorists who analyze society, its entities, and phenomena based on the functions they perform in maintaining the social system.