Quiz 1 covers chapter 1 and 3

Then use the above procedure to test choice B and you will find out P0=4/(0.2-0.5)=$26.7 < $30. So Choice B is not the answer. For choice C, g= 0.4*0.25=10%; P0=Div1/(r-g)=0.6*5/0.1=$30. So choice C is the answer. 38. What is the expected constant growth rate of dividends for a stock currently priced at $50, that is expected to pay a dividend ... ................
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