The Robert Phillips Co

question 99

Multiple Choice

The Robert Phillips Co.currently pays no dividend.The company is anticipating dividends of €0,€0,€0,€.10,€.20,and €.30 over the next 6 years,respectively.After that,the company anticipates increasing the dividend by 4% annually.The first step in computing the value of this equity today,is to compute the value of the share when it reaches constant growth in year:

• A)3
• B)4
• C)5
• D)6
• E)7

---

Definitions:

Collateral

Assets pledged by a borrower to secure a loan or credit, which can be seized by the lender in case of default.

Corporate Angel

A benefactor, often a company, that provides support or rescue financing to help a struggling business or start-up.

Fortune 500

The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks 500 of the largest United States corporations by total revenue for their respective fiscal years.

Private Placement

The sale of securities directly to a select group of investors and institutions rather than through a public offering.