Exhibit 11.8 Use the Information Below for the Following Problem(S)

Multiple Choice

Exhibit 11.8
Use the Information Below for the Following Problem(S)
Fast Grow Corporation is expecting dividends to grow at a 20% rate for the next two years. The corporation just paid a $2 dividend and the next dividend will be paid one year from now. After two years of rapid growth dividends are expected to grow at a constant rate of 9% forever.
-Refer to Exhibit 11.8.If the required return is 14%,what is the value of Fast Grow Corporation common stock today?

A) $40.26
B) $42.38
C) $46.70
D) $52.63
E) $62.78