If Expected Dividends Grow at 8% and the Appropriate Discount

question 35

Multiple Choice

If expected dividends grow at 8% and the appropriate discount rate is 11%,what is the value of a share with an expected dividend of $2.50?

• A) $22.73
• B) $31.25
• C) $13.16
• D) $83.33

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Definitions:

Emissions Tax

A tax on the production, sale, or use of goods that produce pollutants, intended to reduce the harm they cause to the environment.

Marginal Benefit

The added gain achieved by consuming an additional unit of a product or service.

Marginal Benefit

The enhanced pleasure or value a person gains upon consuming one more unit of a particular good or service.

Emissions Tax

A tax imposed on companies for the pollution they produce, intended to motivate them to reduce pollutants and adopt cleaner processes.