If One Expects the Annual Dividend to Be $0

question 86

Multiple Choice

If one expects the annual dividend to be $0.95 five years from today when the current dividend is $0.62, the annual dividend growth rate must be:

• A)9%.
• B)11%.
• C)7%.
• D)13%.

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Definitions:

Income Tax Expense

Income tax expense is the amount of expense that a business recognizes in a given accounting period for the taxes associated with its taxable income.

Journal Entry

A record of a financial transaction in the accounting books of a business or organization.

DR (Debit)

DR, or Debit, represents the left side of a general ledger account and is used to record increases in assets or expenses and decreases in liabilities, equity, and income.

CR (Credit)

An accounting entry that decreases assets or increases liabilities and equity on a company's balance sheet, reflective of the double-entry bookkeeping system.