A Stock Is Expected to Pay $3

question 84

Multiple Choice

A stock is expected to pay $3.20 per share every year indefinitely and the equity cost of capital for the company is 10%.What price would an investor be expected to pay per share next year?

• A)$8.00
• B)$16.00
• C)$24.00
• D)$32.00
• E)$35.20

---

Definitions:

Deterministic

The philosophical view that all events, including moral choices, are completely determined by previously existing causes, often used in the context of free will debates.

Infants

Refers to very young children or babies, typically those under one year of age.

Functionally Autonomous Motives

Motives that originate from an earlier cause but continue to motivate behavior even when that original cause is no longer relevant.

Study of Values

A branch of knowledge that investigates the principles, standards, and what individuals or societies deem important in life.