Hypo Tech Expects Its Net Income to Grow at 20

question 18

Multiple Choice

Hypo Tech expects its net income to grow at 20 percent a year for the next two years and then taper off to a constant 5 percent annual rate of growth. The firm maintains a constant dividend payout ratio. Which one of the following models is best suited for computing the current value of this firm's stock?

• A)irregular dividend
• B)constant perpetual growth
• C)constant dividend
• D)two-stage dividend growth
• E)perpetuity formula

---

Definitions:

Charismatic Leaders

Leaders who inspire and motivate others through their personal charm, persuasiveness, and compelling vision.

Technical Knowledge

Expertise or proficiency in specific fields or disciplines, particularly those involving methods, processes, systems, or machinery.

Need For Control

The desire or requirement to influence or dictate the behavior of others or the outcome of events.

Contingency Theory

A leadership theory that suggests the effectiveness of a leader is contingent upon how their leadership style matches the situation.