The Lighthouse Co

question 72

Multiple Choice

The Lighthouse Co. is in a downsizing mode. The company paid a $2.50 annual dividend last year. The company has announced plans to lower the dividend by $.50 a year. Once the dividend amount becomes zero,the company will cease all dividends permanently. The required rate of return is 16%. What is one share of this stock worth?

• A) $3.76
• B) $4.08
• C) $4.87
• D) $5.13
• E) $5.39

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Definitions:

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Different reasons or theories provided to account for a phenomenon or observation.

Critical Thinking

The objective analysis and evaluation of an issue in order to form a judgment, often requiring skepticism and the questioning of assumptions.

Gender Expectations

Socially constructed norms and beliefs about the behaviors and attributes considered appropriate for men and women in a given society.

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The degree to which a person's physical traits are considered aesthetically pleasing or beautiful by others.