Author Question: When estimating the annual growth rate of a dividend stream, we can use a short-cut to determining ... (Read 39 times)

corkyiscool3328 · **on:** Jul 10, 2018

When estimating the annual growth rate of a dividend stream, we can use a short-cut to determining the average growth rate by ________.

A) using just the first dividend in the stream and the time-value of money equation
B) using just the last dividend in the stream and the time-value of money equation
C) using the first and last dividend in the stream and the time-value of money equation
D) using the first and last dividend in the stream and the future value interest factor

Question 2

A share of common stock has just paid a dividend of 2. If the expected long-run growth rate for this stock is 15, and if investors require a 19 rate of return, what is the price of the stock?

A) 57.50
B) 62.25
C) 71.86
D) 64.00
E) 44.92