JCPenney Company Is Expected to Pay a Dividend in Year

question 25

Multiple Choice

JCPenney Company is expected to pay a dividend in year 1 of $1.65, a dividend in year 2 of $1.97, and a dividend in year 3 of $2.54. After year 3, dividends are expected to grow at the rate of 8% per year. An appropriate required return for the stock is 11%. The stock should be worth _______ today.

• A) $33.00
• B) $40.67
• C) $71.80
• D) $66.00
• E) None of the options are correct.

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Definitions:

Semiperiphery

Countries that occupy an intermediate position in the global economic system, neither fully developed nor among the least developed.

Periphery

In the context of world systems theory, refers to countries that are less developed, often exploited for their resources by more developed core countries, and have weaker economic and political systems.

Population Growth

Population growth refers to the increase in the number of individuals in a population, often measured by the natural rate of birth minus deaths, as well as migration factors.

Economic Development

The process by which the overall health, well-being, and academic level of a nation or region is improved through industrial, political, and social changes.