Company XYZ Just Paid a $2 Dividend, and Future Dividends

question 133

Multiple Choice

Company XYZ just paid a $2 dividend, and future dividends are expected to grow at a rate of 4%forever. If the required rate of return on similar stocks is 12%, what is the value of a share of stockin Company XYZ?

• A) $16.67
• B) $12.50
• C) $25.00
• D) $26.00

Analyze the ethical dilemmas and consequences of the HUAC hearings and the blacklist within Hollywood.

Explore the complex relationship between film auteurs and the auteur theory.

Recognize the intersection of film with American culture and politics, particularly during the mid-20th century.

Identify and calculate variable and fixed components of costs using the high-low method.

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Definitions:

IRR Method

The Internal Rate of Return method, a capital budgeting technique that calculates the rate of return at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero.

Nonconventional Flows

Atypical or irregular cash flows in an investment, complicating the assessment of an investment's value or project's profitability.

Profitability Index

A calculation that measures the relative profitability of an investment, by dividing the present value of future cash flows by the initial investment cost.

Share Price

The current price at which a single share of a company's stock can be bought or sold in the financial markets.