What Should Be the Stock Value One Year from Today

question 48

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%,an expected dividend of $2.80,and a constant dividend growth rate of 7%?

• A) $37.45
• B) $37.80
• C) $40.25
• D) $43.05

---

Definitions:

Negative Message

Communication that conveys bad news, rejection, or a negative outcome to the receiver.

Customer

An individual or organization that purchases goods or services from a business.

Product Recalls

The process of retrieving defective or unsafe goods from consumers and providing those affected with a refund, replacement, or repair.

Company Layoffs

The process by which a company reduces its workforce for reasons such as cost-cutting, restructuring, or downturns in business.