Sawchuck Consulting Has Been Profitable for the Last 5 Years

question 87

Multiple Choice

Sawchuck Consulting has been profitable for the last 5 years, but it has never paid a dividend. Management has indicated that it plans to pay a $0.25 dividend 3 years from today, then to increase it at a relatively rapid rate for 2 years, and then to increase it at a constant rate of 8.00% thereafter. Management's forecast of the future dividend stream, along with the forecasted growth rates, is shown below. Assuming a required return of 11.00%, what is your estimate of the stock's current value?
$\begin{array}{lccccccc}\text { Year } & 0 & 1 & 2 & 3 & 4 & 5 & 6 \\\hline \text { Growth rate } & \text { NA } & \text { NA } & \text { NA } & \text { NA } & 50.00 \% & 25.00 \% & 8.00 \% \\\text { Dividends } & \$ 0.000 & \$ 0.000 & \$ 0.000 & \$ 0.250 & \$ 0.375 & \$ 0.469 & \$ 0.506\end{array}$

• A) $9.94
• B) $10.19
• C) $10.45
• D) $10.72
• E) $10.99

Grasp the concept and significance of the teamwork effect.

Comprehend the process and importance of working together to achieve common goals (teamwork).

Identify the roles and skills essential for effective team and teamwork management.

Understand the impact and management of social loafing within a team.

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Definitions:

Plucking

The removal of pieces of rock by a glacier.

Abrasion

The process of wearing down or rubbing away materials through mechanical action, often seen in geological contexts.

Scraping

the process of removing material from a surface using a hard edge or object.

Gouging

The process of making grooves or marks in a surface, often related to glacial activity in geological contexts.