If the current dividend is 3 and the required return is 16


1. Etling Inc.'s dividend is expected to grow at 7% for the next two years and then at 4% forever. If the current dividend is $3 and the required return is 16%, what is the price of the stock?

a. $29.45

b. $25.54

c. $26.15

d. $27.44

e. $25.10

2. Bond ratings issued by DBRS specifically account for inflation risk.

True

False

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Financial Management: If the current dividend is 3 and the required return is 16
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