Exhibit 11.7 Use the Information Below for the Following Problem(S)

question 23

Multiple Choice

Exhibit 11.7
Use the Information Below for the Following Problem(S)
Consider a firm that has just paid a dividend of $1.5. An analyst expects dividends to grow at a rate of 9% per year for the next three years. After that dividends are expected to grow at a normal rate of 5% per year. Assume that the appropriate discount rate is 7%.
-Refer to Exhibit 11.7.The price of the stock today (P?) is

• A) $84.81
• B) $87.81
• C) $91.09
• D) $94.32
• E) $97.61

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Definitions:

Negative Reinforcer

A stimulus whose removal or avoidance following a behavior increases the likelihood of that behavior being repeated in the future.

Stockbroker

A financial professional who buys and sells stocks and other securities for clients, typically in exchange for a fee or commission.

Reduces Stress

The effect of lowering psychological or physiological strain or tension typically through various strategies or interventions.

Negative Reinforcer

A stimulus whose removal following a behavior increases the likelihood of that behavior being repeated.