Company Y's common stock recently paid a dividend of $1. They have traditionally grown their dividend at

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Question:

Company Y's common stock recently paid a dividend of $1. They have traditionally grown their dividend at 2%. However, after a year of great performance, they have decided to begin growing their dividend at 3%. The price of the common stock is $14.57. If the required return on the common stock is 9%, what will the new stock price be after the change in the dividend growth rate? Responses

$17.00

$16.58

$16.69

$17.17