Using the One-Period Valuation Model,assuming a Year-End Dividend of $0

question 36

Multiple Choice

Using the one-period valuation model,assuming a year-end dividend of $0.11,an expected sales price of $110,and a required rate of return of 10%,the current price of the stock would be

• A)$110.11.
• B)$121.12.
• C)$100.10.
• D)$100.11

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Definitions:

Equation

A formal claim in the realm of mathematics that two formulas, consisting of variables and constants, are equal.

Intercepts

Points where a graph intersects the axes; the x-intercept is where the graph crosses the x-axis, and the y-intercept is where it crosses the y-axis.

Parabola

A specific type of curve on a graph, represented by a quadratic function, characterized by its symmetric shape which can open upwards or downwards.

Graph

A visual representation of data or mathematical functions typically consisting of points on a coordinate plane.