Gadgets Inc

question 10

Multiple Choice

Gadgets Inc.just paid a dividend of $1.55.It expects its earnings and dividends to decline at a rate of 3.0% per year indefinitely.What is the value of the share today if the required return is 12.5%?

• A)$9.70
• B)$10.00
• C)$16.32
• D)$16.81

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Definitions:

Linear Perspective

A technique in visual art to create an illusion of depth on a flat surface, where parallel lines converge at a vanishing point.

Distance Cue

Visual indicators that allow a person to perceive depth or distance in their environment, such as texture gradient or aerial perspective.

Depth Perception

the visual ability to perceive the world in three dimensions, allowing for the estimation of distance.

Interposition

A visual cue that helps to perceive depth by determining that objects blocking other objects from view are closer.