Google Has Just Declared a Dividend of $2

question 88

Multiple Choice

Google has just declared a dividend of $2.12 on its common stock.Dividends are paid annually.Dividends are expected to grow at the rapid pace of 10% for the next 4 years,after which growth is expected to slow to 3% per annum forever.During the rapid growth phase,the required return on this investment will be 20%,and it is expected to drop to 12% when growth slows.What is the current market value of this stock?

• A) $19.73
• B) $23.98
• C) $25.33
• D) $29.43
• E) $74.70

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Definitions:

Cognitive Therapy

A type of psychotherapy aimed at changing negative patterns of thinking, to alter unwanted behavior patterns and treat mood disorders.

Faulty Cognitions

Erroneous or distorted thinking patterns that can lead to maladaptive behavior and emotional responses.

Beck

Refers to Aaron T. Beck, a psychiatrist known for developing cognitive therapy, a foundational element in cognitive behavioral therapy.

Accurate Judgments

The ability to make assessments or decisions that closely reflect the true state of affairs or are correct based on evidence and reasoning.