A Stock Paying $5 in Annual Dividends Sells Now for $80

question 38

Multiple Choice

A stock paying $5 in annual dividends sells now for $80 and has an expected return of 14 percent.What might investors expect to pay for the stock one year from now?

• A)$82.20
• B)$86.20
• C)$87.20
• D)$91.20

Comprehend the significance of market power in pricing and output decisions.

Understand the concept of marginal revenue and how it is calculated.

Analyze the relationship between price, total revenue, and marginal revenue in monopolistic markets.

Determine the impact of price changes on marginal revenue.

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