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LCP, a newly formed medical group, is currently paying dividends of $.50. These dividends are
expected to grow at a 20% rate for the next 5 years and at a 3% rate thereafter. What is the value
of the stock if the appropriate discount rate is 12%?
A) $8.08
B) $11.17
C) $14.22
D) $17.32
E) $30.90

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LCP a newly formed medical group is currently paying divid.pdf

  • 1. LCP, a newly formed medical group, is currently paying dividends of $.50. These dividends are expected to grow at a 20% rate for the next 5 years and at a 3% rate thereafter. What is the value of the stock if the appropriate discount rate is 12%? A) $8.08 B) $11.17 C) $14.22 D) $17.32 E) $30.90