A stock you are evaluating is expected to experience supernormal growth in dividends of 12 percent over the next three years. Following this period,dividends are expected to grow at a constant rate of 4 percent. The stock paid a dividend of $1.50 last year and the required rate of return on the stock is 11 percent. Calculate the stock's fair present value.
A)$16.24
B)$21.56
C)$24.25
D)$27.46
E)None of these choices are correct.

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The Answer of A stock you are evaluating is expected to experience supernormal growth in dividends of 12 percent over the next three years. Following this period,dividends are expected to grow at a constant rate of 4 percent. The stock paid a dividend of $1.50 last year and the required rate of return on the stock is 11 percent. Calculate the stock's fair present value.
A)$16.24
B)$21.56
C)$24.25
D)$27.46
E)None of these choices are correct.

A Stock You Are Evaluating Is Expected to Experience Supernormal