JEN CorpIs Expected to Pay a Dividend of $2

question 17

Multiple Choice

JEN Corp.is expected to pay a dividend of $2.00 per year indefinitely.If the appropriate rate of return on this stock is 12 percent per year,and the stock consistently goes ex-dividend 25 days before dividend payment date,what will be the expected minimum price in light of the dividend payment logistics?

• A)$1.14
• B)$16.54
• C)$16.67
• D)$18.52

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Definitions:

Clustering

A method of grouping a set of objects in such a way that objects in the same group are more similar to each other than to those in other groups.

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A method of generating ideas through spontaneous and free-flowing group discussion.

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Consistency

Consistency refers to the adherence to the same principles, course, form, etc., over a period of time, ensuring uniformity.