Castle,Inc

question 110

Multiple Choice

Castle,Inc.paid a dividend yesterday of $2 per share.Castle management expects the dividend to increase next year to $3 annually.If the dividend is expected to stay at $3 per year for the foreseeable future,what is the value of the stock to an investor with a required rate of return of 10%?

• A) $7.50
• B) $30.00
• C) $32.00
• D) $50.00

---

Definitions:

Market Value

The current price at which an asset can be bought or sold in a public market.

Cost Method

An accounting method used to value investments where the investment is recorded at purchase cost without recognizing interim income or loss.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, without control or joint control.

Common Shares

Equity securities that represent ownership in a corporation, providing voting rights and the potential for dividends.