Simplicity Is a Relatively New fiRm That Appears to Be

question 381

Multiple Choice

Simplicity is a relatively new firm that appears to be on the road to great success. The company paid their first annual dividend yesterday in the amount of $0.15 a share. The company plans to
Double each annual dividend payment for the next four years. After that time, they are planning on
Paying a constant dividend of $2.50 per share indefinitely. What is one share of this stock worth
Today if the market rate of return on similar securities is 13.45%?

• A) $12.32
• B) $12.77
• C) $13.77
• D) $14.22
• E) $14.37

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Definitions:

Raymond Cattell

A psychologist known for his work in personality traits, factor analysis, and the development of several personality assessments.

Projective Test

A type of personality test in which the individual interprets ambiguous stimuli, revealing hidden emotions and internal conflicts.

Thematic Apperception Test

A projective psychological test that asks respondents to create stories about ambiguous scenes, used to uncover underlying motives, concerns, and how they see the social world.

Murray

A psychologist known for his theory of personality, which emphasizes the influence of needs and motives on individual behavior.