Posted: February 8th, 2016

Super Growth Corp. has decided to increase its dividend to $5 per share beginning next year. The firm’s growth rate

Super Growth Corp. has decided to increase its dividend to $5 per share beginning next year. The firm’s growth rate is expected to be 12.5% for the foreseeable future. Investors require a rate of return on the firm’s stock of 18%. Utilize the Gordon Model to calculate the expected price of the firm’s stock.
a. $64
b. $75
c. $83
d. $91
e. $98