Consider a Firm That Had Been Priced Using a 12

question 49

Multiple Choice

Consider a firm that had been priced using a 12 percent growth rate and a 16 percent required return. The firm recently paid a $5.00 dividend. The firm has just announced that because of a new joint venture, it will likely grow at a 12.5 percent rate. How much should the stock price change (in dollars and percentage) ?

• A) $21.50; 13.72 percent
• B) $21.50; 16.14 percent
• C) $20.71; 14.79 percent
• D) $20.71; 19.93 percent

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Math Test

An examination designed to assess an individual’s understanding and proficiency in mathematical concepts and problem-solving.

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The presence of certain factors in a test that systematically advantages or disadvantages certain groups of individuals, leading to unfair assessment outcomes.

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