Use the Information for the Question(s)below

question 74

Multiple Choice

Use the information for the question(s) below.
Defenestration Industries plans to pay a $4.00 dividend this year and you expect that the firm's earnings are on track to grow at 5% per year for the foreseeable future.Defenestration's equity cost of capital is 13%.
-Assuming that Defenestration's dividend payout rate and expected growth rate remain constant,and Defenestration does not issue or repurchase shares,then Defenestration's stock price is closest to:

• A)$50.00.
• B)$32.30.
• C)$22.25.
• D)$30.75.

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Definitions:

Property Taxes

Taxes assessed on real estate by a government, calculated based on the property's value.

Linear Regression

A statistical method used for modeling the relationship between a dependent variable and one or more independent variables by fitting a linear equation to observed data.

Monthly Rental

The amount of money paid periodically (typically monthly) by a tenant to a landlord for the use of a property or space.

Square Footage

Indicates how much floor space is available in a living space.