You Are Considering the Purchase of a Stock with a Current

question 53

Multiple Choice

You are considering the purchase of a stock with a current market price of $50.25 per share.It is expected to pay a dividend of $5.25 next year.Historically the stock has grown at 5%,and based on its risk,you desire to earn a 15% return.Which of the following is true?

• A)Buy the stock,since your estimated price is higher than the market price.
• B)Buy the stock,since your estimated price is lower than the market price.
• C)Do not buy the stock,since your estimated price is lower than the market price.
• D)Do not buy the stock,since your estimated price is higher than the market price.
• E)None of the above are true statements

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Definitions:

Lead-The-Market

A compensation strategy where an organization aims to provide pay rates that are more competitive than the average industry or sector rates to attract and retain top talent.

Compensation Policy

Guidelines and principles that an organization follows to determine how employees are compensated, including salary, benefits, bonuses, and other types of pay.

Labour Markets

The supply and demand for labour, where employees provide the labour and employers provide the jobs, influenced by various economic factors.

Technical Ladder

A career path within an organization that allows employees to advance in their technical skills and expertise without necessarily moving into management positions.