Master Technicians Just Announced That It Is Increasing Its Annual

question 209

Multiple Choice

Master Technicians just announced that it is increasing its annual dividend to $4 and establishing a policy whereby the dividend will increase by 2% annually thereafter. How much will one share of
This stock be worth 10 years from now if the required rate of return is 14%?

• A) $39.83
• B) $40.63
• C) $40.67
• D) $41.44
• E) $41.47

---

Definitions:

Sunk Costs

Costs that have already been incurred and cannot be recovered or refunded.

Marginal Analysis

Marginal analysis evaluates the impact of a slight change in production or consumption, used to make decisions about allocating resources most efficiently.

Risk Aversion

The tendency of individuals or entities to prefer outcomes with less uncertainty, avoiding risks in decision-making.

Economic Payoff

The financial return or profit resulting from an investment or action.