Campbell Soup Co

question 30

Multiple Choice

Campbell Soup Co. paid a $1.55 dividend per share in 2004, which grew to $1.95 in 2009. This growth is expected to continue. What is the value of this stock at the beginning of 2010 when the required return is 10.5 percent?

• A)$35.20
• B)$34.16
• C)$33.48
• D)$32.17

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Definitions:

Residual Value

The estimated value that an asset will realize upon its sale at the end of its useful life, important in calculating depreciation.

Sales Tax

A sales tax is a government-imposed levy on the sale of goods and services, which is usually a percentage of the retail price.

Freight Charges

Costs associated with the transportation of goods from one location to another, typically paid by the shipper or receiver.

Straight-Line Method

A method of calculating depreciation of an asset by evenly spreading its cost over its expected useful life.