Question: I need help trying to understand this; I why is the answer the right answer. Which of the following is the correct formula for the
I need help trying to understand this; I why is the answer the right answer.
Which of the following is the correct formula for the constant-growth DDM (Gordon Growth Model)?
Group of answer choices
A. Po = Div1 (I/Yr - g)
B. Po = Div0 x (1+g) / (I/Yr - g)
C. Both A & B
D. Neither A or B
Also, i would like to confirm another questions
#2 A firm will pay dividends of $1.50, $2.00, and $2.50 over the next three years. After that, the stock will be sold at the end of year 3 for $50. If the required return is 10%, what is the value of the stock?
My answer was 42.47
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