Roxy Incorporated Expects Non-Normal Dividend Growth Over the Next Three

question 102

Multiple Choice

Roxy Incorporated expects non-normal dividend growth over the next three years; that is a 20% growth rate for three years followed by growth of 10% thereafter.If the last dividend paid was $3.00 and the appropriate discount rate is 16%; what is the price of the stock today?

• A) $ 73.24
• B) $ 95.04
• C) $ 70.10
• D) $ 60.89

---

Definitions:

Federal Government

The national government of a federal country, which holds the authority to govern the nation as a whole, in contrast to state or local governments.

Common Crop

A plant or agricultural product that is widely grown and harvested for food, feed, fuel, and other uses in a particular region or country.

Christianizing

The process of converting individuals or groups to Christianity.

Tribal Government

The governing body or system of administration used by indigenous tribes to manage their affairs, often based on traditional customs and laws.