Universal Air Is a No-Growth Firm and Has Two Million

question 62

Multiple Choice

Universal Air is a no-growth firm and has two million shares outstanding. It expects to earn a constant $20 million per year on its assets. If it has no debt, all earnings are paid out as dividends, and the cost of capital is 10 percent, calculate the current price per share of the stock.

• A)$200
• B)$150
• C)$100
• D)$50

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Definitions:

Sample Size

The number of observations or individuals in a subset of the population selected for analysis.

Confidence Intervals

A span of numerical estimates generated from a sample that has a good chance of encompassing the actual value of an unspecified population characteristic.

Effect Size

An evaluative figure representing the scale of a condition or the potency of connections between variables.

Sample Size

The number of individual observations or samples included in a study.