The Growth in Per Share FCFE of CBS, Inc

question 1

Multiple Choice

The growth in per share FCFE of CBS, Inc. is expected to be 10% per year for the next two years, followed by a growth rate of 5% per year for three years. After this five-year period, the growth in per share FCFE is expected to be 2% per year, indefinitely. The required rate of return on CBS, Inc. is 12%. Last year's per share FCFE was $2.00. The first three dividends are worth _______ today.

• A) $12.14
• B) $10.00
• C) $8.99
• D) $9.39
• E) None of the above

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Definitions:

Settling Point

A theory suggesting that body weight is regulated at a predetermined, or "settling," point by the balance between energy intake and energy expenditure.

Decreases In Ghrelin

A reduction in the levels of ghrelin, a hormone that stimulates appetite, which can affect hunger and food intake.

Neophobia

The fear of anything new, including new objects, situations, or experiences.

Base Metabolic Rate

The frequency with which the body utilizes energy while not active, aiming to uphold important functions like oxygen intake and maintaining internal warmth.