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Kramerica, Inc. Kramerica Inc. Just Paid Its Investors a Dividend of $2.00

Question 4

Multiple Choice

Kramerica, Inc.
Kramerica Inc. just paid its investors a dividend of $2.00. This growing company expects dividends to grow at 20% for the next 2 years. After year 2, dividends are expected to grow constantly at 5% per year. Investors require a 15% return on Kramerica stock.
-What is the equation to price Kramerica stock?


A) Kramerica, Inc. Kramerica Inc. just paid its investors a dividend of $2.00. This growing company expects dividends to grow at 20% for the next 2 years. After year 2, dividends are expected to grow constantly at 5% per year. Investors require a 15% return on Kramerica stock. -What is the equation to price Kramerica stock? A) B) C) D)
B) Kramerica, Inc. Kramerica Inc. just paid its investors a dividend of $2.00. This growing company expects dividends to grow at 20% for the next 2 years. After year 2, dividends are expected to grow constantly at 5% per year. Investors require a 15% return on Kramerica stock. -What is the equation to price Kramerica stock? A) B) C) D)
C) Kramerica, Inc. Kramerica Inc. just paid its investors a dividend of $2.00. This growing company expects dividends to grow at 20% for the next 2 years. After year 2, dividends are expected to grow constantly at 5% per year. Investors require a 15% return on Kramerica stock. -What is the equation to price Kramerica stock? A) B) C) D)
D) Kramerica, Inc. Kramerica Inc. just paid its investors a dividend of $2.00. This growing company expects dividends to grow at 20% for the next 2 years. After year 2, dividends are expected to grow constantly at 5% per year. Investors require a 15% return on Kramerica stock. -What is the equation to price Kramerica stock? A) B) C) D)

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