How Much Should You Pay for a Share of Stock

question 78

Multiple Choice

How much should you pay for a share of stock that offers a constant growth rate of 10 percent, requires a 16 percent rate of return, and is expected to sell for $50 one year from now?

• A)$42.00
• B)$45.00
• C)$45.45
• D)$47.00

---

Definitions:

Hole-in-one

A golfing term that describes the act of a golfer hitting the ball from the tee into the hole with just one stroke.

Subsequent Putt

A putt that follows an initial putt in the game of golf, attempting to get the ball into the hole.

Average Number

The value found by adding all the numbers in a set together and then dividing by the count of those numbers, often used in statistical analysis.

At-bats

A statistical count in baseball that represents the number of times a player gets in position to bat, excluding walks, sacrifices, and certain other situations.