Bouchard and Company Hired You as a Consultant to Help

question 52

Multiple Choice

Bouchard and Company hired you as a consultant to help estimate its cost of common equity.You have obtained the following data: D0 = $0.85; P0 = $22.00; and g = 6.00% The CEO thinks, however, that the stock price is temporarily depressed, and that it will soon rise to $40.00.Based on the DCF approach, by how much would the cost of common from retained earnings change if the stock price changes as the CEO expects?

• A)-1.49%
• B)-1.66%
• C)-1.84%
• D)-2.03%
• E)-2.23%

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Definitions:

Subjective/Objective Data

Information categorized into subjective (based on personal opinions or feelings) and objective (based on observable and measurable facts) in clinical assessments.

Identifying Data

Information that can be used to recognize or distinguish an individual's identity.

Interview Technique

Methods and strategies used during interviews to effectively gather information or evaluate qualifications.

Plan Of Action

A detailed strategy or course of actions designed to achieve a specific goal or objective.