Equity Investments Q236

236An investor gathers the following data on a company:
Next year’s sales revenue: $150 million
Next year’s net profit margin: 10% Dividend payout ratio: 40%
Dividend growth rate expected during Years 2 and 3: 15% Dividend growth rate expected after Year 3: 5%
Investors' required rate of return: 12%
Number of outstanding shares: 7.5 million
The current value per share of the company’s common stock according to the two-stage dividend discount model is closest to:

Option : A
Explanation :

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