ABC common stock is expected to have extraordinary growth in earnings and dividends of 20% per year for 2 years, after which the growth rate will settle into a constant 6%. If the discount rate is 15% and the most recent dividend was $2.50, what should be the approximate current share price?

1. $31.16
2. $33.23
3. $37.39
4. $47.77

Answer rating: 100% (QA)

Most recent dividend D0 250 growth rate for 2 years 20 So D1 250120 ... View the full answer