Martin's Yachts Has Paid Annual Dividends of $1

question 32

Multiple Choice

Martin's Yachts has paid annual dividends of $1.40,$1.75,and $2.00 a share over the past three years,respectively. The company now predicts that it will maintain a constant dividend since its business has leveled off and sales are expected to remain relatively constant. Given the lack of future growth,you will only buy this stock if you can earn at least a 15% rate of return. What is the maximum amount you are willing to pay to buy one share today?

• A) $10.00
• B) $13.33
• C) $16.67
• D) $18.88
• E) $20.00

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Definitions:

Pharmacologic Treatment

The use of medications as a method to treat disease, alleviate symptoms, or prevent further medical complications.

Manic Episodes

Periods of abnormally elevated mood, energy, and activity levels, often seen in bipolar disorder.

Depressive Episodes

Periods marked by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in activities, often accompanying major depressive disorder.