A Stock You Are Interested in Paid a Dividend of $1

question 54

Multiple Choice

A stock you are interested in paid a dividend of $1 last month. The anticipated growth rate in dividends and earnings is 25% for the next 2 years before settling down to a constant 5% growth rate. The discount rate is 12%. Calculate the expected price of the stock.

• A) $15.38
• B) $20.50
• C) $21.05
• D) $22.27
• E) $26.14

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Definitions:

Metric

A standard of measurement used to quantify performance, effectiveness, or efficiency in certain areas or processes.

Revenue

The total amount of money generated by a company from its normal business activities, typically from the sale of goods and services to customers.

Supply Chain Performance

A measurement of how effectively and efficiently a supply chain fulfills customer demands and operates in terms of cost, quality, and speed.

Transportation

The process or activity of moving goods and products from one location to another, a crucial component of the logistics and supply chain management.