Use the Following Information to Answer the Question(s)below

question 68

Multiple Choice

Use the following information to answer the question(s) below.
Nielson Motors has a share price of $50.00.Its dividend was $2.50,and you expect Nielson Motors to raise its dividend by approximately 6% per year in perpetuity.
-If Nielson's equity cost of capital is 13%,then Nielson's expected share price is closest to:

• A)$19.23.
• B)$37.86.
• C)$35.71.
• D)$50.00.

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Definitions:

Accommodation

Providing convenience or the act of furnishing something like a room or building for use or lodging.

Control Account

A summary account that consolidates detailed information held in subsidiary ledgers, simplifying the general ledger.

Subsidiary Accounts

Individual accounts contained within a general ledger, used to provide detailed information about a specific aspect of the business.

General Ledger

A comprehensive record of a company's financial transactions over the duration of its life, organized by accounts.