You Wish to Earn a Return of 11% on Each

question 23

Multiple Choice

You wish to earn a return of 11% on each of two stocks,A and B. Stock A is expected to pay a dividend of $3 in the upcoming year while stock B is expected to pay a dividend of $2 in the upcoming year. The expected growth rate of dividends for both stocks is 4%. Using the constant growth DDM, the intrinsic value of stock A _________.

• A) will be higher than the intrinsic value of stock B
• B) will be the same as the intrinsic value of stock B
• C) will be less than the intrinsic value of stock B
• D) more information is necessary to answer this question

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Definitions:

Navigation Pane

A feature in software applications that allows users to easily locate and manage different elements of a document or database, providing quick access to specific sections.

Navigation Pane

The Navigation Pane is a component of a software interface that allows users to easily browse and locate different sections or features of an application, often seen in file managers and email clients.

Rename

The action of changing the name of a file, folder, or other object in a computer system to something else.

Database Object

An entity in a database system used to store or reference data, such as tables, views, or procedures.