Deluxe Company Expects to Pay a Dividend of $2 Per

question 45

Multiple Choice

Deluxe Company expects to pay a dividend of $2 per share at the end of year-1, $3 per share at the end of year-2 and then be sold for $32 per share. If the required rate on the stock is 15%, what is the current value of the stock?

• A) $28.20
• B) $32.17
• C) $32.00
• D) None of the given answers

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Definitions:

Cognitive Skills

Mental abilities that are part of the thinking process, aiding in problem solving, memory, decision making, and learning.

Ethnicity

A social group that shares a common and distinctive culture, religion, language, or the like.

Ethological Theory

A perspective in psychology that stresses the evolutionary and biological roots of behavior, often examining behaviors from a survival or adaptive standpoint.

Critical Period

A specific time in development when exposure to certain stimuli or experiences is necessary for proper development.