A Stock Paying $5 in Annual Dividends Sells Now for $80

question 135

Multiple Choice

A stock paying $5 in annual dividends sells now for $80 and has an expected return of 14 percent.What might investors expect to pay for the stock one year from now?

• A)$82.20
• B)$86.20
• C)$87.20
• D)$91.20 Expected return =

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Definitions:

Correlation

A statistical measurement of the relationship between two variables, indicating how one may predict the other.

Coefficient of Determination

Denoted as R-squared, it measures the proportion of the variance in the dependent variable that is predictable from the independent variable(s) in a regression model.

Regression Line

A line that best fits the data points in a scatter plot, showing the relationship between two variables.

Variation

The extent to which data points in a statistical distribution or data set diverge from the average or mean.