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:

Negative Effects

Unfavorable or harmful outcomes resulting from an action, event, or condition.

Type B Personality

A personality type characterized by lower levels of stress, patience, relaxation, and an easy-going attitude compared to Type A personality.

Easygoing

Characterized by a relaxed and tolerant attitude; not easily upset or stressed.

Hostile

Exhibiting or feeling aggression or anger towards someone or something, often characterized by antagonistic actions or attitudes.