Whistle Stop Pays a Constant Annual Dividend of $4 on Its

question 10

Multiple Choice

Whistle Stop pays a constant annual dividend of $4 on its stock. The company will maintain this dividend for the next 3 years and will then cease paying dividends forever. What is the current price per share if the required return on this stock is 15.6 percent?

• A) $10.38
• B) $9.52
• C) $9.04
• D) $9.28
• E) $10.02

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Definitions:

Generativity

A stage of adult development focused on creating or nurturing things that will outlast an individual, often by parenting or contributing to society.

Identity Certainty

The level of confidence and clarity an individual has about their own sense of self and identity.

Big Five Model

A personality psychology theory identifying five main traits that describe human personality: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Openness To Experience

A personality trait that involves a willingness to consider new ideas, experiences, and various forms of intellectual and cultural exploration.