A Stock You Are Interested in Paid a Dividend of $1

question 51

Multiple Choice

A stock you are interested in paid a dividend of $1 last week. The anticipated growth rate in dividends and earnings is 20% for the next year and 10% the year after that before settling down to a constant 5% growth rate. The discount rate is 12%. Calculate the expected price of the stock.

• A) $17.20
• B) $17.90
• C) $18.20
• D) $19.40
• E) $19.75

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Definitions:

Genetic Differences

Variations in the DNA sequences among individuals that contribute to biological diversity.

Variations

Differences or deviations from the norm within any given population.

Niche Construction

The process by which organisms alter their own and each other's environments, potentially influencing their own evolution.

Ecological Inheritance

The transmission of environmental modifications produced by organisms across generations, influencing evolutionary processes.