The Common Stock of Tigre Tools Has a Required Return

question 48

Multiple Choice

The common stock of Tigre Tools has a required return of 14.5 percent and a growth rate of 3.6 percent. The last annual dividend was $1.50 a share. What is the current price of this stock?

• A) $13.76
• B) $13.92
• C) $14.26
• D) $14.87
• E) $15.30

---

Definitions:

Par Value

A nominal value assigned to shares of stock by the issuing company, which has little relation to its market value.

Undervalued

A financial assessment that concludes an asset or a company's market price is lower than its intrinsic value.

Overvalued

Refers to a situation where the price of an asset exceeds its intrinsic value, often due to speculative demand.

Consolidated Equipment

Consolidated Equipment collectively refers to the physical assets reported on a consolidated financial statement, encompassing all subsidiaries and the parent company.