If Next Year's Dividend Is Forecast to Be $5

question 140

Multiple Choice

If next year's dividend is forecast to be $5.00,the constant-growth rate is 4%,and the discount rate is 16%,then the current stock price should be:

• A) $31.25
• B) $40.00
• C) $41.67
• D) $43.33

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Definitions:

Gilded Age

A period in the late 19th century characterized by rapid industrialization, economic growth, and ostentatious displays of wealth in the U.S.

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Refers to the steadfast allegiance or support of voters towards a particular political party or candidate over time.