If a Company Has a Current Stock Price of $25

question 78

Multiple Choice

If a company has a current stock price of $25, an EPS of $2.75/share; EPS growth rate of 15% and the investors rate of return is 20%, calculate the cash cow price.

• A) $13.75
• B) $14.50
• C) $15.25
• D) $16.00
• E) $16.75

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Definitions:

Operant Conditioning

A learning process through which the strength of a behavior is modified by reinforcement or punishment.

Extinction

The gradual weakening and disappearance of a conditioned response tendency because the response is no longer reinforced.

Conditioned Stimulus

In classical conditioning, a previously neutral stimulus that, after becoming associated with an unconditioned stimulus, eventually comes to trigger a conditioned response.

Unconditioned Stimulus

A stimulus that naturally and automatically triggers a response without prior conditioning.