The Following Information Relates to Yutter Corporation -What Is the Value of Yutter's Stock at the End

question 24

Multiple Choice

The following information relates to Yutter Corporation:
$\begin{array}{lr}&\text { Year } 1\\\text { Net income-year ended } 12 / 31 & \$ 12,500 \\\text { Dividends } & 3,000 \\\text { Return on net operating assets } & 13 \% \\\text { Return on equity } & 15 \% \\\text { Cost of equity } & 12 \%\end{array}$
-What is the value of Yutter's stock at the end of Year 1 using the dividend discount model assuming that the dividend payout ratio remains constant and Yutter grows at its sustainable equity growth rate?

• A)$83,333
• B)$157,642
• C)$500,000
• D)$557,000

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Definitions:

Defender Strategy

a business strategy focused on maintaining current markets and customers, often by focusing on product improvement and maintaining a stable growth rate.

Entrepreneurial Employees

Refers to employees within an organization who possess an entrepreneurial mindset, often driving innovation, taking initiative, and contributing to the company's growth like internal entrepreneurs.

HR Managers

Professionals responsible for overseeing human resource functions within an organization, including recruitment, training, compensation, and compliance with employment laws.

High Levels

This term is too broad without context, but in general, it can refer to anything that is considered above average in quantity, quality, or intensity.