You Are Considering Buying a Share of Stock in XYZ

question 147

Multiple Choice

You are considering buying a share of stock in XYZ Corporation.At the end of years 1,2,and 3 the stock will pay you a dividend of $15.In addition,at the end of the third year you expect to sell the share of stock for $100.If the interest rate is 3%,how much is the share of XYZ stock worth to you today?

• A)$123.14
• B)$133.94
• C)$137.96
• D)$145.00

---

Definitions:

Exemplar Model

A theory in cognitive psychology suggesting that individuals categorize objects and concepts based on comparisons to mental examples of similar instances.

Categorizing Concepts

The mental process of grouping objects, ideas, or information into classes or categories based on common characteristics or attributes.

Prototype Model

A way of thinking about concepts: Within each category, there is a best example—a prototype—for that category.

Concepts

Abstract ideas or mental symbols that are used to represent, organize, or understand objects, events, or thoughts based on common properties or characteristics.