27

Previous Page Next Page Page 27 of 41 Question 27 (2.5 points) Cojective, Inc just paid a dividend of $7.95 per share (that is, Do = 7.95). Investors expect this dividend to grow at 25% next year (i.e., in year 1) and at 15% the following year (i.e., in year 2). Thereafter, dividends are expected to grow at a constant rate of 5% forever (i.e., for year 3, 4, 5, ..., co). If the required rate of return on this stock is 19.9%, the equilibrium price of the stock should be $_ Your Answer: Answer Previous Page Next Page Page 27 of 41 Submit Quiz 11 of 41 questions saved