Use the Information for the Question(s)below

question 50

Multiple Choice

Use the information for the question(s) below.
The JRN Corporation will pay a constant dividend of $3 per share,per year,in perpetuity.Assume that all investors pay a 20% tax on dividends and that there is no capital gains tax.The cost of capital for investing in JRN stock is 12%.
-Assume that management makes a surprise announcement that JRN will no longer pay dividends but will use the cash to repurchase stock instead.The price of a share of JRN's stock is now closest to:

• A)$20.00.
• B)$25.00.
• C)$18.00.
• D)$24.00.

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Definitions:

Fundamentalist Groups

Fundamentalist Groups are religious movements characterized by a strict adherence to specific theological doctrines, often in a reaction against modernist interpretations of religion.

Harlem Renaissance

A cultural, social, and artistic explosion that took place in Harlem, New York during the 1920s, highlighting African American cultural expressions.

New Negro

A term associated with the Harlem Renaissance, reflecting a new sense of identity, cultural pride, and political awareness among African Americans during the early 20th century.

White Culture

A term that can refer to the social norms, values, and practices traditionally associated with white people from Western or European ancestry.