Computing current stock price


Question: The Connors firm's last dividend was $1.00. Its dividend growth rate is expected to be constant at 15 percent for 2 years, after which dividends are expected to increase at a rate of 10% forever. Connors' required return is 12%. Calculate Connors' current stock price?

[A] $58.15

[B] $60.07

[C] $54.91

[D] $56.82

[E] $62.87

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Finance Basics: Computing current stock price
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