Its dividend growth rate is expected to be constant at 15


The Ramirez Company's last dividend was $1.75. Its dividend growth rate is expected to be constant at 15% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return is 12%. What is the best estimate of the current stock price?

A. $42.76
B. $36.60
C. $39.14
D. 36.24
E. $38.77

 

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Finance Basics: Its dividend growth rate is expected to be constant at 15
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