What Is the Current Value of a Share of Chyrox

question 95

Multiple Choice

What is the current value of a share of Chyrox if its current dividend is $1.50 and dividends are expected to grow at an annual rate of 20 percent for the next 5 years? Assume the investor has a required rate of return of 15 percent and expects to sell the security in 5 years for $72.

• A)$44.31
• B)$35.78
• C)$39.63
• D)$72.00

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Definitions:

Error Term

In statistical modeling, it represents the difference between observed values and those predicted by a model.

Simple Regression

a technique that estimates the relationship between a dependent variable and a single independent variable using a straight line.

Intercept

The point where a line, curve, or surface intersects a coordinate axis; often used in the context of the y-intercept of a line in a graph.

Slope

The measure of the steepness or incline of a line, defined as the ratio of the change in the y-variable to the change in the x-variable.