We talked about several valuation models during the semester. Which of the formulas below is consistent with a two - stage dividend discount model where

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We talked about several valuation models during the semester. Which of the formulas below is consistent with a two-stage dividend discount model where the the first stage assumes an initial annual growth rate for N years and the second stage assumes no growth in the subsequent dividends after the Nth year? In the formulas shown below for this question assume that g1 and g2 are both positive. Assume the references to rE, wacc, D, g1, g2, and FCF are consistent with the notation used in the lectures when talking about DCF models. [ Iswer A: SharePrice _0=(_t=0^ND_0(1+g_1)^t/(1+r_E)^t)+D_N(1+g_2)/r_E-g_2/(1+r_E)^N; swer B: SharePrice Sh _0=(_t=0^ND_0(1+g_1)^t/(1+ wacc )^t)+D_N(1+g_2)/ wacc -g_2/(1+ wacc )^N; swer C: SharePrice _0=(_t=0^ND_0(1+g_1)^t/(1+r_E)^t)+D_N/r_E/(1+r_E)^N; swer D: SharePrice _0=(_t=0^NF C F_0(1+g_1)^t/(1+ wacc )^t)+F C F/ wacc /(1+ wacc )^N; ]

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