A Fast Growing Firm Recently Paid a Dividend of $1

question 29

Multiple Choice

A fast growing firm recently paid a dividend of $1.00 per share. The dividend is expected to increase at a rate of 15% rate for the next 3 years. Afterwards, a more stable 6% growth rate can be assumed. If a 10% discount rate is appropriate for this stock, what is its value?

• A) $33.54
• B) $37.99
• C) $39.37
• D) $42.03

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Definitions:

Haitian Vodou

A syncretic religion practiced chiefly in Haiti, incorporating elements of West African religions, Roman Catholicism, and indigenous Taino beliefs.

Worship

The act of showing reverence and adoration for a deity through rituals, prayers, or other religious practices.

Saints

Individuals recognized for their holiness, virtuous conduct, and often miraculous deeds within many religious traditions, considered capable of interceding on behalf of the faithful.

Religion

A set of beliefs, values, and practices concerning the nature of existence, the cosmos, and the purpose of life, often involving worship of a deity or deities.