Francis Inc

question 32

Multiple Choice

Francis Inc.'s stock has a required rate of return of 10.25%, and it sells for $57.50 per share. The dividend is expected to grow at a constant rate of 6.00% per year. What is the expected year-end dividend, D1?

• A) $2.20
• B) $2.44
• C) $2.69
• D) $2.96
• E) $3.25

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Definitions:

Divorce

The legal dissolution of a marriage by a court or other competent body.

Distribution

The process of making a product or service available for use or consumption by a consumer or business user.

Trust

An arrangement in which title to property is held by one person (a trustee) for the benefit of another (a beneficiary).

Grantor

The person or entity that creates a trust and transfers property into it, or someone who grants or conveys a legal right.