USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 48

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Fast Grow Corporation is expecting dividends to grow at a 20 percent rate for the next two years. The corporation just paid a $2 dividend, and the next dividend will be paid one year from now. After two years of rapid growth, dividends are expected to grow at a constant rate of 9 percent forever.
-Refer to Exhibit 8.5. If the required return is 14 percent, what is the value of Fast Grow Corporation common stock today?

• A) $40.26
• B) $42.38
• C) $46.70
• D) $52.63
• E) $62.78

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Definitions:

Direct Statements

Clear and straightforward expressions that communicate an idea assertively and without ambiguity.

Motivational Factor

An element or circumstance that stimulates an individual’s enthusiasm, energy, or desire to undertake specific actions or persevere in a task.

Praises

Expressions of approval, commendation, or admiration directed towards a person, group, or entity.

Informal Style

A casual and relaxed way of communication or presentation not bound by strict formal rules or conventions.