Consider a firm that had been priced using a 10.00 percent growth rate and a 15.00...

Consider a firm that had been priced using a 10.00 percent growth rate and a 15.00 percent required rate. The firm recently paid a $1.30 dividend. The firm has just announced that because of a new joint venture, it will likely grow at a 12.00 percent rate. How much should the stock price change (in dollars and percentage)?

Multiple Choice

$16.00, 100.00%
$16.00, 1.00%
$19.93, 70.00%
$19.93, .70%

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Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 1 year ago

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