Changes in Growth and Stock Valuation Consider a Firm That

Multiple Choice

Changes in Growth and Stock Valuation Consider a firm that had been priced using a 6 percent growth rate and a 9 percent required rate. The firm recently paid a $0.50 dividend. The firm has just announced that because of a new joint venture, it will likely grow at an 8 percent rate. How much should the stock price change (in dollars and percentage) ?

A) $33.33, 67%
B) $33.33, 198%
C) $36.33, 67%
D) $36.33, 206%