Last Week, Railway Cabooses Paid Its Annual Dividend of €1

question 98

Multiple Choice

Last week, Railway Cabooses paid its annual dividend of €1.20 per share.The company has been reducing the dividends by 10% each year.How much are you willing to pay to purchase share in this company if your required rate of return is 14%?

• A)€4.50
• B)€7.71
• C)€10.80
• D)€15.60
• E)€27.00

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Definitions:

Informally

In a casual or unofficial manner, outside the contexts of formal or structured settings.

Attitude-Behavior Correspondence

The degree to which an individual's attitude is reflected in their behavior.

Judgment

The ability to make considered decisions or come to sensible conclusions based on a critical assessment of facts and information.

Context

The circumstances or background that surround and give meaning to an event, statement, or idea.