The Growth in Dividends of XYZ, Inc

question 24

Multiple Choice

The growth in dividends of XYZ, Inc.is expected to be 10% per year for the next two years, followed by a growth rate of 5% per year for three years.After this five-year period, the growth in dividends is expected to be 2% per year, indefinitely.The required rate of return on XYZ, Inc.is 12%.Last year's dividends per share were $2.00.What should the stock sell for today?

• A)$8.99
• B)$25.21
• C)$40.00
• D)$110.00

Understand how incentives influence behavior in economic contexts.

Grasp the concept of scarcity and how it impacts economic decisions.

Recognize the importance of marginal analysis in making economic decisions.

Identify the role of government and policies in modifying behaviors through economic incentives.

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Definitions:

Sales Calls

Direct communication efforts, often by phone or in person, made by salespeople to potential customers to promote or sell a product or service.

Product Lines

A group of related products under a single brand offered by a company.

Cost Of Goods Sold

An accounting term that refers to the direct costs attributable to the production of the goods sold by a company.

Territorial Evaluation

The assessment of geographical regions within a market for the purpose of business development and strategic planning.