Nu-Tek,Inc

question 6

Multiple Choice

Nu-Tek,Inc. is expecting a period of intense growth and has decided to retain more of its earnings to help finance that growth. As a result it is going to reduce its annual dividend by 10% a year for the next three years. After that,it will maintain a constant dividend of $.70 a share. Last month,the company paid $1.80 per share. What is the value of this stock if the required rate of return is 13%?

• A) $6.79
• B) $7.22
• C) $8.22
• D) $8.87
• E) $9.01

---

Definitions:

Herd Immunity

A form of indirect protection from infectious disease that occurs when a significant percentage of a population has become immune to an infection, thereby providing a measure of protection for individuals who are not immune.

Adult Weight

The body weight or mass of an individual after reaching full physical maturity, contrasting with childhood or adolescent weights.

Marasmus

A form of severe malnutrition characterized by energy deficiency; it is a condition that can occur in infants and young children in developing countries.

Kwashiorkor

A form of malnutrition caused by protein deficiency in the diet, typically affecting young children in the developing world.