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Lohn Corporation is expected to pay the following dividends over the next four years: $9, $8, $4, and $1. Afterward, the company pledges to maintain
Lohn Corporation is expected to pay the following dividends over the next four years: $9, $8, $4, and $1. Afterward, the company pledges to maintain a constant 5 percent growth rate in dividends forever. If the required return on the stock is 12 percent, what is the current share price? Multiple Choice o $26.06 o $27.43 o $2729 o $28.25 o $36.41 Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 12 years because the firm needs to plow back its earnings to fuel growth. The company will pay a dividend of $13 per share 13 years from today and will increase the dividend by 5 percent per year thereafter. If the required return on this stock is 12 percent, what is the current share price? Multiple Choice o $45.28 o $50.05 o $49.10 o $47.67 o $42.56
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