A Stock Is Currently Priced at $65 Per Share and Will

question 71

Multiple Choice

A stock is currently priced at $65 per share and will pay a $4 dividend in one year. What must the stock sell for in one year to meet investors' expectations of a 15% after-tax yield if dividends are taxed at 28%? Ignore capital gains taxes due to investor timing.

• A) $70.75
• B) $71.87
• C) $73.63
• D)$76.00

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Definitions:

Performance Advantages

Benefits or superior outcomes achieved by individuals, teams, or organizations that effectively utilize their resources, talents, and strategies.

Conservative Decision

A decision-making approach that involves choosing options that have the least potential for negative outcomes or risks, preferring safety and stability.

Complex Problems

Issues or challenges that are multi-faceted, involving numerous variables, and are difficult to understand or solve.

Homogeneous Teams

Groups consisting of members with similar backgrounds, skills, and perspectives, which can lead to more harmonious operations but may lack diversity in thought.