How Much Should You Pay for a Share of Stock

question 14

Multiple Choice

How much should you pay for a share of stock that offers a constant growth rate of 10%, requires a 16% rate of return, and is expected to sell for $50 one year from now?

• A)$42.00
• B)$45.00
• C)$45.45
• D)$47.00 Expected return = expected dividend yield
• + expected capital appreciation
• Then:
• )16 = .06 + expected capital appreciation
• )10 = expected capital appreciation
• And
• P 1 = 110% of P o

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Unemployment Rate

The share of the labor market that is out of work and in the process of seeking new employment.

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A selection of individuals from a population where each individual has an equal chance of being chosen, ensuring the sample represents the population well.

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Canada's national statistical agency tasked with compiling data on the country's economy, society, and environmental conditions.

Alpha

In statistics, it represents the level of significance, marking the threshold for rejecting the null hypothesis; in finance, it denotes the active return on an investment compared to a benchmark index.