A Stock Is Expected to Pay a $4

question 70

Multiple Choice

A stock is expected to pay a $4.00 dividend per share. The growth rate is expected to be 5 percent. If investors demand 10 percent on this stock, what is the expected price of the stock 10 years from now?

• A) $94.68
• B) $92.17
• C) $130.31
• D) $126.93

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Definitions:

Unearned Fees

Unearned fees are payments received by a company for services yet to be provided or completed, considered a liability until the service is fulfilled.