Exhibit 11.4 Use the Information Below for the Following Problem(S)

question 56

Multiple Choice

Exhibit 11.4
Use the Information Below for the Following Problem(S)
Davenport Corporation's last dividend was $2.70 and the directors expect to maintain the historic 3 percent annual rate of growth. You plan to purchase the stock today because you feel that the growth rate will increase to 5 percent for the next three years and the stock will then reach $25 per share.
-Refer to Exhibit 11.4.How much should you be willing to pay for the stock if you require a 17 percent return?

• A) $16.97
• B) $22.16
• C) $21.32
• D) $32.63
• E) $23.63

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Definitions:

Paired Bar Graphs

Graphs that use bars to compare two sets of data side by side.

Correlation

A statistical measure that indicates the extent to which two or more variables fluctuate together.

Condense

To reduce something in volume, size, or extent by eliminating or compressing parts.

Clarify

To make something clear or easier to understand by providing more detail or simplification.