What Is the Value of GM Which Currently Has a Dividend

question 126

Multiple Choice

What is the value of GM which currently has a dividend of $2 and is growing at 7%? The investor's required rate of return is 11%.

• A)$46
• B)$50
• C)$52
• D)none of the above

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Definitions:

Direct Labor Variances

The differences between the actual costs of direct labor and the standard or expected costs, used for budgeting and cost control.

Direct Labor Workers

Employees who are directly involved in the production of goods or services.

Property, Plant, and Equipment

Long-term tangible assets held for business use and not expected to be converted to cash in the short term.

Variable Overhead Rate

Variable overhead rate is the cost per unit of indirect or overhead activities that vary with production volume, such as electricity for machinery.