Which of the Following Values Is Closest to the Amount

question 41

Multiple Choice

Which of the following values is closest to the amount that should be paid for a share that will pay a dividend of €10 in one year and €11 in two years? The share will be sold in 2 years for an estimated price of €120.The appropriate discount rate is 9%.

• A)€114.60
• B)€119.43
• C)€124.20
• D)€129.50
• E)€138.75

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Definitions:

Demand Schedule

A demand schedule is a table that shows the quantity of a good or service that consumers are willing to purchase at various price points.

Slope

The measure of steepness or incline, typically describing the change in the vertical over the change in the horizontal.

Price Elasticity

A measure of how the quantity demanded of a good or service changes in response to changes in its price, indicating the sensitivity of consumers to price changes.

Cable Subscribers

Consumers who pay for access to cable television services.