A Firm Does Not Pay a Dividend

question 14

Multiple Choice

A firm does not pay a dividend. It is expected to pay its first dividend of $1.50 per share in three years. This dividend will grow at 6 percent indefinitely. Using a 10 percent discount rate, compute the value of this stock.

• A) $29.86
• B) $30.99
• C) $41.25
• D) $42.79

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Definitions:

Iconic Memory

A type of sensory memory that holds a brief visual impression of a scene after the stimulus has been removed.

Auditory Sensory Memory

The short-term storage of auditory information, allowing sounds to be retained briefly for processing after the sound has finished.

Visual Sensory Memory

The component of the sensory memory system which stores visual information for a very brief period.

Registered Nurse

A licensed healthcare professional who provides patient care, including medication administration, patient education, and support for recovery and health maintenance.