Use the Information for the Question(s)below

question 70

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%.
-Suppose that Defenestration decides to pay a dividend of only $2 per share this year and use the remaining $2 per share to repurchase stock.If Defenestration's payout rate remains constant,then Defenestration's stock price is closest to:

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

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Definitions:

Distributed Practice

A learning strategy where practice is broken up into a number of short sessions over a longer period of time.

Proactive Interference

The occurrence in which earlier memories interfere with the retrieval of more recent memories.

Testing Effect

The enhanced memory performance and retention resulting from being tested on material as opposed to only studying it.

Repressed Memories

Repressed memories are memories that have been unconsciously blocked due to being associated with a high level of stress or trauma.