DDP Enterprises Currently Does Not Pay a Dividend but Plans

question 92

Multiple Choice

DDP Enterprises currently does not pay a dividend but plans to makes its first dividend payment of $1 in 3 years,if the expected growth rate is 10% per year once dividends commence,and the appropriate is discount rate is 18%,what is the current stock price today?

• A) $ 8.98
• B) $ 8.37
• C) $ 13.75
• D) $ 14.75

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Definitions:

Operating Supplies

Items that are consumed during the day-to-day operations of a business, including stationery, cleaning products, and small tools.

Competitive Price

The pricing of goods or services in a manner that is attractive to consumers while remaining sustainable for the business, often used to gain an advantage in the market.

Reliable

Describes something or someone that consistently performs well or maintains effectiveness over time, often used to refer to products, services, or information.

Desired Date

The specific day or time a person or organization wishes an event to occur or a task to be completed.