Central Inc

question 70

Essay

Central Inc.has an 11.5% required rate of return.It does not expect to initiate dividends for 20 years,at which time it will pay $3.75 per share in dividends.At that time,Central expects its dividends to grow at 6% forever.What is an estimate of Central's price in 20 years (P20)if its dividend at the end of year 20 is $3.75? What is its price in today's dollars if you desire a rate of return of 12%?

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Definitions:

Large-volume Clients

Large-volume Clients are customers who purchase goods or services in large amounts, often receiving discounts or special terms due to the volume of their transactions.

Autocratic Leaders

Leaders who make all decision-making within an organization or group unilaterally, without much (or any) input from team members.

Decision-making Processes

The set of cognitive, psychological, and social activities involved in identifying, evaluating, and choosing between alternative courses of action.

Empower Employees

The act of giving staff the authority, resources, and freedom to make decisions and contribute to the company's goals in meaningful ways.