A Firm Is Expected to Pay a Dividend of $2

question 46

Multiple Choice

A firm is expected to pay a dividend of $2.00 next year and $2.14 the following year. Financial analysts believe the stock will be at their target price of $75.00 in two years. Compute the value of this stock with a required return of 10 percent.

• A) $65.40
• B) $66.67
• C) $65.57
• D) $79.14

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Definitions:

French Colonialism

The period of expansion, conquest, and administration by France over various territories across the globe, notably in Africa and Southeast Asia.

Marshall Plan

An American initiative passed in 1948 to aid Western Europe, in which the United States gave over $12 billion (nearly $100 billion in 2020 dollars) in economic assistance to help rebuild Western European economies after the end of World War II.

Objectives

Represents goals or targets that are intended to be achieved in a specific period.

United States

A country in North America consisting of 50 states, known for its significant influence in global economics, culture, and politics.