Main Street Tool & Die Is in a Downsizing Mode

question 184

Multiple Choice

Main Street Tool & Die is in a downsizing mode. The company paid a $2 annual dividend last year. The company has announced plans to lower the dividend by $.50 a year. Once the dividend amount becomes zero, the company will cease all dividends permanently. You place a required rate of return of 18% on this particular stock given the company's situation. What is one share of this stock worth to you today?

• A) $2.29
• B) $2.47
• C) $2.68
• D) $2.72
• E) $2.83

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Definitions:

Primary Sex Characteristics

The physical attributes directly involved in reproduction, such as the ovaries in females and the testes in males.

Hormonally Driven

Behaviors or physiological processes that are significantly influenced or regulated by hormones.

Rounded Jaw

A facial structure feature characterized by a smooth and less angular jawline.

Kohlberg

A theoretical framework proposed by Lawrence Kohlberg that outlines the stages of moral development in individuals.