-Net Income Is Expected to Increase by 10% for the 2005

question 16

Multiple Choice

$$\begin{array}{l}\text { Rivaz Corporation }\\\begin{array} { l r } & 2005 \\\text { Net Income } & \$ 3,000 \\\text { Dividends } & \$ 1,000 \\\text { Total Assets } - 12 / 31 / 05 & \$ 35,000 \\\text { Total Liabilities } - 12 / 31 / 05 & \$ 21,225 \\\text { Number of shares outstanding } & 1,000 \\\text { Cost of Equity } & 12 \%\end{array}\end{array}$$
-Net income is expected to increase by 10% for the next year, and dividend payout ratio is expected to remain constant. After 2006, retained earnings are expected to decrease to zero. Using the residual income method what is the value per share of Rivaz stock as of 12/31/05?

• A)$15.25
• B)$15.16
• C)$14.38
• D)$13.77

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The party that wins a lawsuit or legal proceeding, either through judgement or settlement.

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Financial compensation awarded in a lawsuit, exceeding simple compensation, intended to punish the defendant for egregious behavior.

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Part of the Civil Rights Act of 1964 in the United States, prohibiting employment discrimination based on race, color, religion, sex, or national origin.

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