A Stock Recently Paid a Dividend of $2

question 11

Multiple Choice

A stock recently paid a dividend of $2.5 per share. Its growth rate is expected to be 8 percent. Investors require a 10 percent return. The stock is selling in the market for $150. What is this stock worth and is the stock undervalued or overvalued?

• A) $125; undervalued
• B) $125; overvalued
• C) $135; undervalued
• D) $135; overvalued

---

Definitions:

Chiral

Describes a molecule that has non-superimposable mirror images, often resulting in molecules with different optical activities.

Achiral

Describes molecules that are identical to their mirror image and do not exhibit chirality.

Chiral

Pertaining to a molecule that cannot be superimposed on its mirror image, often leading to optical activity.

Achiral

Describing a molecule that is superimposable on its mirror image, thus not exhibiting chirality.