Sedgwick, Inc

question 34

Multiple Choice

Sedgwick, Inc. has a 12% required rate of return. It does not expect to initiate dividends for 15 years, at which time it will pay $2.00 per share in dividends. At that time, Sedgwick expects its dividends to grow at 7% forever. What is an estimate of Sedgwick's price in 15 years (P₁₅) if its dividend at the end of year 15 is $2.00?

• A) $42.80
• B) $33.40
• C) $31.20
• D) $30.00

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Definitions:

Confirmation

The act of verifying or validating a hypothesis, statement, or belief by obtaining evidence that supports it.

Replication Studies

Investigations conducted to confirm the findings of previous research by repeating the same study to verify its results.

Making Measurable

The process of defining or setting metrics to quantify progress, performance, or outcomes.