An analyst's forecast for a company's dividends for the next three years are: 

D1 = $4,700 

D2 = $5,100 and 

D3 = $5,400 

If the analyst uses an Re = 10% and g = 3% for the company, what would be the continuous growth (in dollars) for the company using the dividend approach model? 

A. $12,548 

B. $59,472 

C. $65,419 

D. $23,184 

A company has a book value of $2 billion, a market cap of $8 billion, its dividend payout percentage is 1.80% and its operating profit is 22.2%. 

What amount does this equate to using the Buffett formula? 

A. 72 

B. 8 

C. 6 

D. 12.5

Answer rating: 100% (QA)

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