Question: QUESTION 10 Microsoft is expanding rapidly in the Cloud technology and currently needs to retain all of its earnings. It recently paid a dividend of

QUESTION 10 Microsoft is expanding rapidly in the Cloud technology and

QUESTION 10 Microsoft is expanding rapidly in the Cloud technology and currently needs to retain all of its earnings. It recently paid a dividend of $5.34. This dividend is expected to grow each year at the following growth rates: Year 1 20.0% Year 2 25.0% Year 3 35.0% After year three, the growth rate is expected to resume a normal constant rate of 8.0%. The firm has a required rate of return in the amount of 12.0%. What is the current value of Microsoft? a. $227.62 b. $205.35 c. $212.22 d. $272.26

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