Tayco Corporation Has Just Paid Dividends of $3 Per Share

question 14

Multiple Choice

Tayco Corporation has just paid dividends of $3 per share.The earnings per share for the company was $4.If you believe that the appropriate discount rate is 15% and the long term growth rate in dividends is 6%,and earnings is 6%,the firm's P/E ratio is

• A) 8.33
• B) 33.33
• C) 44.44
• D) 11.11
• E) None of the above

---

Definitions:

Overconfidence

Refers to the cognitive bias where an individual's subjective confidence in their judgments is reliably greater than their objective accuracy.

Economic and Military Predictions

The process of forecasting future economic trends and military capabilities or situations based on current data and trends.

Correlational Design

A type of research methodology that examines the relationship between two or more variables without manipulating them.

Naturally Occurring Relationships

Relationships that form without any intervention or manipulation by researchers, reflecting genuine connections between entities.