Exhibit 11.5 Use the Information Below for the Following Problem(S)

question 72

Multiple Choice

Exhibit 11.5
Use the Information Below for the Following Problem(S)
The National Motor Company's last dividend was $1.25 and the directors expect to maintain the historic 4 percent annual rate of growth. You plan to purchase the stock today because you feel that the growth rate will increase to 7 percent for the next three years and the stock will then reach $25.00 per share.
-Refer to Exhibit 11.5.How much should you be willing to pay for the stock if you feel that the 7 percent growth rate can be maintained indefinitely and you require a 16 percent return?

• A) $11.15
• B) $14.44
• C) $14.86
• D) $18.90
• E) $19.24

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Definitions:

Role Transition

The process of changing from one role to another, which can involve acquiring new skills, changing status, or adapting to new expectations.

Socialization

this is the process by which individuals learn and adopt the norms, values, behaviors, and social skills appropriate to their social positions.

Resocialization

The process by which individuals undergo significant change in their patterns of behavior, beliefs, and values, often through deliberate interventions like training or therapy.

Trustworthiness

The quality of being reliable, honest, and deserving of trust.