Question: 8. The formula for pricing a stock with a single-stage dividend discount model (DDM) is: a. PO = (DO*(1+g))/(r-g) b. P1 = D1/(r-g) c. D1

8. The formula for pricing a stock with a single-stage dividend discount model (DDM) is: a. PO = (DO*(1+g))/(r-g) b. P1 = D1/(r-g) c. D1 = PO/(r-g) 9. A stock just paid a dividend of $0.40, and dividends are expected to grow at a stable 5% forever. If the required rate of return on the stock is 9.5%, the intrinsic value per share of the stock is: a. $9.33 b. $9.80 c. $8.89

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