In the Non-Constant Growth Model Where the First Phase of Growth

question 77

Multiple Choice

In the non-constant growth model where the first phase of growth is 5 years, followed by a second phase of constant growth:

• A)P₅= D₆/(K_e-g).
• B)P₀ = the present value of dividends from years 1 - 5 plus the present value of P₅.
• C)the company's growth rate is probably higher than K_e during the first 5 years.
• D)All of the above are correct

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