What Should Be the Stock Value One Year from Today

question 17

Multiple Choice

What should be the stock value one year from today for a stock that currently sells for $35, has a required return of 15 percent, an expected dividend of $2.80, and a constant dividend growth rate of 7 percent?

• A)$37.45
• B)$37.80
• C)$40.25
• D)$43.05

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Definitions:

Bundle of His

A collection of heart muscle cells specialized for electrical conduction that transmits the electrical impulses from the AV node to the ventricles of the heart.

Telangiectasis

The dilation of small or terminal blood vessels, causing spider-like or threadlike red lines or patterns on the skin or mucous membranes.

-Ectasis

A suffix indicating dilation or expansion of a hollow organ or vessel.

Cardiotonic

A substance that increases the contractility of the heart muscle, improving its performance.