A Share of Common Stock Has Just Paid a Dividend

question 24

Multiple Choice

A share of common stock has just paid a dividend of $2.00. If the expected long-run growth rate for this stock is 15 percent, and if investors require a 19 percent rate of return, what is the price of the stock?

• A) $57.50
• B) $62.25
• C) $71.86
• D) $64.00
• E) $44.92

---

Definitions:

Illegal

Actions or activities that are forbidden by law or statute and subject to criminal or civil penalties.

Exculpatory Clause

A contract provision that releases one party from liability for wrongful acts or negligence.

False Rumour

An untrue statement or tale spread among people, often causing misunderstanding or misinformation.

Insurance Policy

An insurance policy is a contract between an individual or entity and an insurance company, outlining coverage terms and conditions for specific risks.