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Question 1 1 pts Calculate the current price Po for the common stock of Polychrome Corporation using the Dividend Discount Model (DDM). Assume the firm
Question 1 1 pts Calculate the current price Po for the common stock of Polychrome Corporation using the Dividend Discount Model (DDM). Assume the firm paid an annual dividend last year of Do = $1.80. Investors in this stock require a rate of return of R - 10%, and the constant growth rate of the annual dividend is g = 5.0%. What is the current theoretical price or Po? $16.80 $26.11 $49.70 $54.31 $37.80 Question 2 1 pts Calculate Po for the common stock of Ajax Corporation according to the Dividend Discount Model (DDM). The firm has maintained an annual dividend of $2 per share for many years and is expected to be paid in future years, i.e., a dividend growth rate of g = zero. If investors require a return of 11% on similar investments, determine the intrinsic value of the company's stock right now or Po $30.00 $18.18 $19.19 $15.00 $22.22
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