The Lighthouse Co

question 242

Multiple Choice

The Lighthouse Co. is in a downsizing mode. The company paid a $2.50 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 16% on this particular stock given the company's situation. What is one share of this stock worth to you today?

• A) $3.76
• B) $4.08
• C) $4.87
• D) $5.13
• E) $5.39

---

Definitions:

Maslow's Hierarchy

A theory in psychology proposed by Abraham Maslow in 1943, which outlines a five-tier model of human needs, arranged in a hierarchy.

First Level

The initial or elementary stage in a series or categorization system.

Physical and Economic Survival

The requirement for basic necessities that sustain life and the financial means to secure these necessities.

Understanding Others

involves the ability to empathize and comprehend the thoughts, emotions, and behaviors of others, fostering better interpersonal relationships.