Wingnut Systems Pty Ltd Is Expected to Pay a Dividend

question 9

Multiple Choice

Wingnut Systems Pty Ltd is expected to pay a dividend of $2.54 at the end of the current year and that dividend is expected to grow at a constant rate of 4% p.a.The company's shareholders require a return of 10% p.a.on their investment.What is Wingnut System's current share price?

• A)$44.03
• B)$48.15
• C)$42.33
• D)$46.57

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Definitions:

Tender Offer

A public, open offer or invitation by a prospective acquirer to all shareholders of a publicly traded corporation to tender their stock for sale at a specific price during a certain time.

Hostile Takeover

An acquisition attempt by one company of another that is resisted by the target company's management and board of directors.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another when entrusted with the care of money or property.

Voidable Contract

A contract that may be legally voided at the option of one of the parties due to reasons like fraud, duress, or misrepresentation.