A Firm Expects to Pay Dividends at the End of Each

question 14

Multiple Choice

A firm expects to pay dividends at the end of each of the next four years of R2.00, R1.50, R2.50, and R3.50.If growth is then expected to level off at 8 percent, and if you require a 14 percent rate of return, how much should you be willing to pay for this share?

• A) R67.81
• B) R22.49
• C) R58.15
• D) R31.00
• E) R43.97

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Definitions:

Representative Sample

A subset of a population that accurately reflects the characteristics of the entire group, crucial for reliable research or data analysis.

Data Collection

The process of gathering and measuring information on variables of interest in a systematic fashion.

Methods

Various techniques or processes used to accomplish tasks or achieve objectives.

Statistical Inference

The process of using data analysis to deduce properties of an underlying distribution of probability.