The Common Stock of Tigre Tools Has a Required Return

question 306

Multiple Choice

The common stock of Tigre Tools has a required return of 14.5 % and a growth rate of 3.6 %. The last annual dividend was $1.50 a share. What is the current price of this stock?

• A) $13.76
• B) $13.92
• C) $14.26
• D) $14.87
• E) $15.30

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Definitions:

Current Market Value

refers to the amount at which an asset or security could be bought or sold in a current transaction between willing parties.

Historical Cost

The original monetary value of an asset or liability as recorded at the time of acquisition, not adjusted for inflation or market changes.

Historical Rate of Exchange

The exchange rate that was in effect at the time of a past transaction.

Foreign Currency Units

Units of currency used in a country other than one's own, representing money from foreign nations.