82. The following information is available about a company: Next year’s sales revenue $180 million Next year’s net profit margin 15% Dividend payout ratio 60% Dividend growth rate expected during Years 2 and 3 25% Dividend growth rate expected after Year 3 5% Investors' required rate of return 12% Number of outstanding shares 8.1 million The current value per share of the company’s common stock according to the two-stage dividend discount model is closest to: A. $39.36. B. $49.20. C. $51.20.

QUESTIONS 79 THROUGH 90 RELATE TO EQUITY INVESTMENTS

MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING 2013

82. The following information is available about a company:

Next year’s sales revenue

$180 million

Next year’s net profit margin

15%

Dividend payout ratio

60%

Dividend growth rate expected during Years 2 and 3

25%

Dividend growth rate expected after Year 3

Investors' required rate of return

12%

Number of outstanding shares

8.1 million

The current value per share of the company’s common stock according to the two-stage

dividend discount model is closest to:

A. $39.36.

B. $49.20.

C. $51.20.