Q23

Summit Systems has an equity cost of capital of 1,5%, wn pay adv dend of $1.75 none year and its ydends had been expected to grow by 65% per year You read r the paper that Sumn Systems hasrevenget prospea and now expects its dividends to grow at a rate of 4.0% per year forever. 23. It you tried to sell your Summit Systems stock after reading this news, what price would you be likely to get? O A. You would receive $35.00 because when you bought the stock, the dividend growth rate was OB. You would receive S35.00 if you act very quickly because it takes a day or two for markets to ??. You would receve$23.33 because markets are e cient and Ould inc rporatethe information O D. You would receive a price between $23.33 and $35.00 because you should get a blend of the st 6.5% incorporate the information about the nevw growth rate. about the new growth rate immediately old and new growth rate of dividends. ID: adapted from HW 10-22 24. A semety