A Firm Is Expected to Pay a Dividend of $2

question 39

Multiple Choice

A firm is expected to pay a dividend of $2.00 next year and $3.75 the following year. Financial analysts believe the stock will be at their price target of $125.00 in two years. Compute the value of this stock with a required rate of return of 15 percent.

• A) $78.34
• B) $81.05
• C) $87.13
• D) $99.09

Recognize the importance of industrial and technological advancements in shaping the U.S. economy.

Understand the significance of the New Deal and its lasting impact on American society and economy.

Identify the major social and economic shifts post-World War II, including the trend toward suburbanization.

Understand the nature and classification of intangible assets and natural resources on the balance sheet.