An Issue of Common Stock Has Just Paid a Dividend

question 100

Multiple Choice

An issue of common stock has just paid a dividend of $3.75.Its growth rate is 8%.What is its price if the market's rate of return is 16%?

• A) $25.01
• B) $46.88
• C) $50.63
• D) $54.38

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Definitions:

Monetary Policy

Actions undertaken by a central bank to control the supply of money and interest rates in its economy.

Fiscal Policy

Government policies related to taxation and government spending to influence the economy.

Lags

Lags refer to the delay between the implementation of economic policy or action and its actual effect on the economy, often observed in fiscal and monetary policies.

Time-inconsistency Problem

The situation where a decision-maker's preferences change over time in such a way that what is preferred at one point in time is inconsistent with what is preferred at another time.