QUESTIONS 79 THROUGH 90 RELATE TO EQUITY INVESTMENTS

83. - MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING 2012
MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING 2012
83. An investor evaluating a company's common stock for investment has gathered the following data. Earnings per share (2012) $2.50Dividend payout ratio (2012) 60%Dividend growth rate expected during Years 2013 and 2014 25%Dividend growth rate expected after Year 2014 5%Investors' required rate of return 12%Using the two-stage dividend discount model, the value per share of this common stock in 2012 is closest to: A. $28.57. B. $31.57. C. $38.70.