Assume Zero-Sum Enterprise Pays an Annual Dividend of $1

question 51

Multiple Choice

Assume Zero-Sum Enterprise pays an annual dividend of $1.40 per share and that neither earnings nor dividends are expected to grow in the future.What is the value of Zero-Sum's stock to an investor who requires a 14 percent rate of return?

• A)$14.00
• B)$10.00
• C)$20.00
• D)0

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Definitions:

Correlation Coefficient

A statistical measure that indicates the extent to which two variables change together, showing how one variable's movement is related to another's.

Standard Deviation

A statistical measurement that illustrates how spread out the values of a data set are around the mean, indicating the variability or volatility.

Expected Returns

The anticipated average return of an investment over a certain period, taking into account both the probability and the impact of all possible outcomes.

Corresponding Weights

The respective importance or influence assigned to components within a mathematical formula or financial model.