The Last Annual Dividend Paid by New Technologies Was $1

question 37

Multiple Choice

The last annual dividend paid by New Technologies was $1.40 a share. Dividends for the next 3 years will be increased at an annual rate of 8 percent. After that, dividends are expected to increase by 3 percent each year. The discount rate is 16 percent. What is the current value of this stock?

• A)$10.40
• B)$12.60
• C)$13.33
• D)$14.10
• E)$15.55

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Definitions:

Clear-Cut

Something that is easily understood or determined; unambiguous and straightforward.

Principle of Justice

A fundamental ethical principle focusing on fairness, equality, and moral rectitude in the treatment of individuals within a society.

Ethical Philosophy

The branch of philosophy that involves systematizing, defending, and recommending concepts of right and wrong behavior.

Whistleblowing

Turning in or otherwise exposing people who behave unethically in your company.