You Are Trying to Determine the Appropriate Price to Pay

question 69

Multiple Choice

You are trying to determine the appropriate price to pay for a share of common stock. If you purchase this stock, you plan to hold it for 1 year. At the end of the year you expect to receive a dividend of $5.50 and to sell the stock for $154. The appropriate rate of return for this stock is 16 percent. What should the current price of this stock be?

• A)$150.22
• B)$162.18
• C)$137.50
• D)$98.25
• E)$175.83

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Definitions:

Data Mining

The process of analyzing large datasets to discover patterns, trends, and relationships that can inform decision making or predict future outcomes.

Data Mining

The process of discovering patterns, anomalies, and correlations within large data sets to predict outcomes, using a variety of techniques including machine learning, statistics, and database systems.

Analytics

The systematic computational analysis of data or statistics.

Aggregating

The process of combining multiple pieces of data together to form a summary or a whole.