Multiple Choice
Summer Co. expects to pay a dividend of $4.00 per share-one year from now-out of earnings of $7.50 per share. If the required rate of return on the stock is 15 percent and its dividends are growing at a constant rate of 10 percent per year, calculate the present value of growth opportunities for the stock (PVGO) .
A) $80
B) $30
C) $50
D) $26
Correct Answer:
Verified
Correct Answer:
Verified
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