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:

Quarterly Sales

The total revenue generated by a business during a specific quarter of the fiscal year.

Receivable Factoring

A financial transaction where a business sells its accounts receivable (invoices) to a third party (factor) at a discount, in order to obtain immediate cash.

Line Of Credit

A flexible loan from a bank or financial institution that has a maximum limit, allowing the borrower to access funds as needed up to the credit limit.

Short-Term Financial Plan

A strategy focusing on managing current liabilities and assets to meet short-term operational and financial goals.