The Double Dip Co

question 37

Multiple Choice

The Double Dip Co. is expecting its ice cream sales to decline due to the increased interest in healthy eating. Thus,the company has announced that it will be reducing its annual dividend by 5% a year for the next two years. After that,it will maintain a constant dividend of $1 a share. Two weeks ago,the company paid a dividend of $1.40 per share. What is this stock worth if you require a 9% rate of return?

• A) $10.86
• B) $11.11
• C) $11.64
• D) $12.98
• E) $14.23

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Definitions:

Goal Setting

The process of identifying something that one aims to achieve and establishing measurable objectives and timeframes to accomplish it.

Efficiency;Effectiveness

Efficiency refers to accomplishing something with the least waste of time and effort; effectiveness is about achieving the intended or desired result.

Management By Objectives

A management strategy where employees and managers collaborate to set, understand, and achieve specific objectives within an organization.

Performance Management

A systematic process by an organization to improve employee performance through objectives, feedback, and coaching.