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:

Equal Worth

The principle recognizing that all human beings have intrinsic value, deserving of the same respect and rights.

Constitutional Convention

A gathering for the purpose of writing or revising a constitution, notably the convention in Philadelphia in 1787 which resulted in the drafting of the U.S. Constitution.

Dominant Culture

The culture of the most powerful group in society, encompassing its beliefs, values, language, and traditions.

Judeo-Christian

A term describing values, beliefs, and cultural systems derived from the religious practices and ethical teachings of Judaism and Christianity.