Financial Analysts Forecast ABC Inc

question 116

Multiple Choice

Financial analysts forecast ABC Inc. growth for the future to be 12 percent. ABC's recent dividend was $1.60. What is the value of ABC stock when the required return is 15 percent?

• A) $59.73
• B) $63.72
• C) $79.81
• D) $91.02

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Definitions:

Economic Questions

Fundamental questions that societies address regarding allocation of resources and distribution of goods and services; typically includes "what to produce," "how to produce," and "for whom to produce."

Particular Goods

Specific items or products that are distinguished by their unique features, functions, or qualities from general or generic goods.

Discount Rate

The interest rate used to determine the present value of future cash flows in discounted cash flow analysis.

Cash Flows

The movement of funds in and out of a company or financial entity, crucial for assessing its financial health.