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:

Cost of Goods Sold

Represents the direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor directly used to create the product.

Ending Inventory

The total value of all inventory a company has in stock at the end of its fiscal period.

Beginning Inventory

The financial amount of goods up for sale at the start of an economic period.

Year 1

Often refers to the first year of operations for a business or the first year in a multi-year financial analysis.