Gamma Corp

question 59

Multiple Choice

Gamma Corp. is expected to pay the following dividends over the next four years: $5, $12, $18, and $1.80. Afterwards, the company pledges to maintain a constant 4 percent growth rate in dividends, forever. If the required return on the stock is 14 percent, what is the current share price?

• A) $37.92
• B) $41.06
• C) $43.18
• D) $46.09
• E) $49.31

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Definitions:

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