A Firm Has a Current Price of $40 a Share

question 90

Multiple Choice

A firm has a current price of $40 a share, an expected growth rate of 11 percent and expected dividend per share (D1) of $2. Given its risk you have a required rate of return for it of 12 percent. Assuming that you expect the stock price to increase to $42 during the investment period, your expected rate of return and decision would be:

• A)10% -do not buy
• B)12%- do not buy
• C)14% -buy
• D)16% - buy
• E)18% - buy

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Definitions:

Lewin's Model

A change management model created by Kurt Lewin that includes three stages: unfreezing, changing, and refreezing.

Organizational Change

A process through which a company or organization alters its structures, strategies, operational methods, technologies, or organizational culture to effect change within the organization and adapt to new market trends or challenges.

Transformational Change

The process of change that results in a major and comprehensive redirection of the organization.

Major Redirection

Significant changes or adjustments in strategy, goals, or focus, often in response to changing external conditions or new insights.