What Should Be the Current Price of a Share of Stock

question 126

Multiple Choice

What should be the current price of a share of stock if a $5 dividend was just paid, the stock has a required return of 20 percent, and a constant dividend growth rate of 6 percent?

• A)$19.23
• B)$25.00
• C)$35.71
• D)$37.86

---

Definitions:

Exclusive Provider Organization

A managed care plan where services are covered only if you use doctors, specialists, or hospitals in the plan's network, except in an emergency.

Health Maintenance Organization

A type of health insurance plan that often requires members to access healthcare services from a specific network of providers.

Allotted Time Period

The specific duration that is assigned or permitted for a particular task, event, or activity.

Modified Wave

A change or adaptation in a wave pattern, often referring to scheduled appointments or signals, to achieve a desired outcome or behavior.