单选题

An investor uses the data below and Gordon's constant growth dividend discount model to evaluate a company's common stock. To estimate growth, she uses the average value of the:
1) compounded annual growth rate over the period 2006-2011 and
2) sustainable growth rate for the year 2011.

A、 $23.71.
B、 $25.31.
C、 $30.14.

【正确答案】 B

【答案解析】

B is correct. V₀ = D₁ /(r-g).
Dividend growth rate over the period 2006-2011 = 1.25(1 + g)⁵ = 1.92; g = 8.96% ≈9%. Sustainable growth rate for the year 2011:
b = Earnings retention rate = (1 - Dividend payout ratio) =
g = b × ROE; g = 0.40 × 12% = 4.8%
Average of the two approaches =