Von Bora Corporation (VBC)is Expected to Pay a $2

question 85

Multiple Choice

Von Bora Corporation (VBC) is expected to pay a $2.00 dividend at the end of this year.If you expect VBC's dividend to grow by 5% per year forever and VBC's equity cost of capital is 13%,then the value of a share of VBC stock is closest to:

• A)$25.00.
• B)$40.00.
• C)$15.40.
• D)$11.10.

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Definitions:

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