What Is the Value of a Stock Expected to Pay

question 56

Multiple Choice

What is the value of a stock expected to pay a constant $5 dividend each year forever, if the market required rate of return is 18%?

• A) $90
• B) $28
• C) $36
• D) $23

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Definitions:

Separation Methods

Techniques used in chemistry and manufacturing to divide components of mixtures into individual constituents, such as distillation and filtration.

Sales Mix

The sales mix is the proportion of different products or services that a company sells, influencing overall profitability.

Break-even Point

The production level or sales volume at which total revenues equal total expenses, resulting in no net profit or loss.

Sensitivity Analysis

An approach to assess how different values of an independent variable affect a specific dependent variable under a given set of assumptions.