What constant growth rate in dividends is expected

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Reference no: EM13813883

What constant growth rate in dividends is expected for a stock valued at $32.00 if next year's dividend is forecast at $2.00 and the appropriate discount rate is 12.5%? `

A. 5.00%

B. 6.25%

C. 6.75%

D. 15.38%

Gentleman Gym just paid its annual dividend of $3 per share, and it is widely expected that the dividend will increase by 5 percent per year indefinitely. If the discount rate is 15%, what should be fair price of its stock?

A. $15

B. $20

C. $31.5

D. $48.3

Reference no: EM13813883

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