The correct answer to this open question is the following.
Companies can help to ensure they do their part toward achieving the Sustainable Development Goals set out by UNCTAD by establishing a continuing education program so employees can do what is expected on this issue. Management can start funding campaigns to donate some money to the cause. Ask employees to give volunteering time to noble causes and environmental. The company has to set an example from top management to the operational level to do the right thing always, no matter the circumstances.
We are talking about the sustainability development goals created by the United Nations Conference on Trade and Development (UNCTAD).
Answer:
$41.66
Explanation:
Let us assume the dividend in year n be denoted by Dn and the Stock price by Pn
Given that,
D0 = $1.50
Now
Growth rate for next 3 years
g1 = 15%
D1 = D0 × (1 + g1)
= 1.50 × (1 + 0.15)
= 1.725
D2 = D1 × (1 + g1)
= 1.725 × (1 + 0.15)
= 1.984
D3 = D2 × (1 + g1)
= 1.984 × (1 + 0.15)
= 2.282
Subsequent Growth rate = g2 = 4%
Now
D4 = D3 × (1 + g2)
= 2.282 × (1 + 0.04)
= 2.373
So, According to Gordon's Growth Rate,
P3 = D4 ÷(r - g2)
P3 = 2.373 ÷ (0.09 - 0.04)
= $47.46
Now
Value of Stock now is
= P0
= D1 ÷ (1 + r) + D2 ÷ (1 + r)^2 + D3 ÷ (1 + r)^3 + P3 ÷ (1 + r )^3
= 1.725 ÷ (1 + 0.09) + 1.984 ÷ (1 + 0.09)^2 + 2.282 ÷ (1 + 0.09)^3 + 47.46 ÷ (1 + 0.09)^3
= $41.66
D. There is a maximum yearly contribution limit
