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Changes in Growth and Stock Valuation Consider a firm that had been priced using a 11.00...

Changes in Growth and Stock Valuation Consider a firm that had been priced using a 11.00 percent growth rate and a 16.00 percent required rate. The firm recently paid a $1.70 dividend. The firm has just announced that because of a new joint venture, it will likely grow at a 13.00 percent rate. How much should the stock price change (in dollars and percentage)?

Multiple Choice

  • $21.00, 1.00%

  • $21.00, 100.00%

  • $26.29, .70%

  • $26.29, 70.00%

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