ABC CorpIs Expected to Pay a Dividend of $5

question 39

Multiple Choice

ABC Corp.is expected to pay a dividend of $5.00 per year indefinitely.If the appropriate rate of return on this stock is 5 percent per year,and the stock consistently goes ex-dividend 45 days before dividend payment date,what will be the expected maximum price in light of the dividend payment logistics?

• A)$98.83
• B)$100.00
• C)$103.77
• D)$123.29

Recognize varying interpretations and critiques of the marginal productivity theory of income distribution.

Distinguish between compensating differentials and efficiency wages in the context of wage disparities.

Assess the role of discrimination and demographic factors in influencing income distribution.

Examine the influence of educational attainment and skill level on wage differences.

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Definitions:

Permanent Accounts

Accounts that are not closed at the end of the accounting period, hence carry their balances over into the next period; these include asset, liability, and equity accounts.

Temporary Accounts

Accounts that are closed at the end of each accounting period, including revenue, expense, and dividend accounts.

Adjusting Entry

A journal entry made at the end of an accounting period to update account balances before preparing financial statements.

Unearned Service Revenue

Represents payments received for services that have not yet been performed or delivered, classified as a liability on the balance sheet.