What Should Be the Price for a Common Stock Paying

question 19

Multiple Choice

What should be the price for a common stock paying $3.50 annually in dividends if the growth rate is zero and the discount rate is 8 percent?

• A)$22.86
• B)$28.00
• C)$42.00
• D)$43.75

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Definitions:

Gene Expression

Multistep process by which the information in a gene guides assembly of an RNA or protein product. Includes transcription and translation.

DNA

Deoxyribonucleic acid, a molecule that carries the genetic instructions used in the growth, development, functioning, and reproduction of all known living organisms.

RNA

Ribonucleic acid. Nucleic acid with roles in gene expression. Most are single-stranded chains of ribonucleotides (adenine, guanine, cytosine, and uracil). See messenger RNA, transfer RNA, ribosomal RNA.

Protein

Organic molecule that consists of one or more polypeptides.