Exhibit 20-7 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 65

Multiple Choice

Exhibit 20-7
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
Consider a firm that has just paid a dividend of $1.5. An analyst expects dividends to grow at a rate of 9% per year for the next three years. After that dividends are expected to grow at a normal rate of 5% per year. Assume that the appropriate discount rate is 7%.
-Refer to Exhibit 20-7. What is the future price of the stock in year 3?

• A) $81.75
• B) $84.81
• C) $92.56
• D) $101.85
• E) $111.16

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Definitions:

Authentic

Genuine or not counterfeit; truly what something is said to be; real or reliable in origin or fact.

Idiosyncratic

Peculiar or unique characteristics; aspects that are distinctive to an individual or specific entity, deviating from the norm.

Human Relationships

The connections and interactions between individuals, encompassing a broad range of dynamics including friendship, family ties, and romantic partnerships.

Affiliation

The connection or association with a group or organization, often for mutual benefit or shared identities.