What Is the Value of the Expected Dividend Per Share

question 120

Multiple Choice

What is the value of the expected dividend per share for a stock that has a required return of 16 percent, a price of $45, and a constant growth rate of 10 percent?

• A)$2.70
• B)$3.60
• C)$4.50
• D)$7.20 $45 = DIV./(.16 - .10)
• $45 x .06 = DIV.

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Definitions:

Competitive Spectrum

The range of competition within a market, from monopolies to perfectly competitive markets, affecting pricing, innovation, and consumer choice.

Cartels

Organizations or associations formed by businesses in the same industry to regulate production, prices, and marketing of goods, often to restrict competition.

Oligopoly

A market structure characterized by a small number of firms dominating the market, leading to limited competition.

Business Firms

Organizations involved in the production, distribution, or sale of goods and services for profit.