Nonconstant Growth: BioSci, Inc

question 24

Multiple Choice

Nonconstant growth: BioSci, Inc., a biotech firm has forecast the following growth rates for the next three years: 30 percent, 25 percent, and 20 percent. The company then expects to grow at a constant rate of 7 percent for the next several years. The company paid a dividend of $2.00 last week. If the required rate of return is 16 percent, what is the market value of this stock?

• A) $51.03
• B) $36.86
• C) $56.12
• D) $46.37

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