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Business, 21.03.2020 07:33 mixonhomeschool

Savickas Petroleum’s stock has a required return of 12%, and the stock sells for $43 per share. The firm just paid a dividend of $1.00, and the dividend is expected to grow by 30% per year for the next 4 years, so D4 = $1.00(1.30)4 = $2.8561. After t = 4, the dividend is expected to grow at a constant rate of X% per year forever. What is the stock’s expected constant growth rate after t = 4, i. e., what is X?

a.
5.15%

b.
6.78%

c.
6.37%

d.
5.49%

e.
7.25%

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Savickas Petroleum’s stock has a required return of 12%, and the stock sells for $43 per share. The...
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