How Much Would You Pay for a Common Share Today

question 67

Multiple Choice

How much would you pay for a common share today if you expect it will pay a dividend of $2.50 each year and will sell for $58 two years from now? Assume your required rate of return on this share is 13.0%.

• A)$60.50
• B)$55.50
• C)$53.54
• D)$49.59

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Definitions:

Self-perceptions

An individual's awareness and understanding of their own characteristics, emotions, and behaviors.

Ideal

A concept or standard of perfection that is aspired to; often used in the context of goals, values, or qualities that are deemed to be the most desirable.

Ought

A term expressing duty, correctness, or moral obligation, indicating what should be done.

Self-assessment

The process of evaluating one's own thoughts, feelings, behaviors, and abilities, often in relation to personal goals or standards.