What Should You Pay for a Stock If Next Year's

question 94

Multiple Choice

What should you pay for a stock if next year's annual dividend is forecast to be $5.25,the constant-growth rate is 2.85%,and you require a 15.5% rate of return?

• A) $31.25
• B) $38.87
• C) $41.50
• D) $42.68

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Definitions:

Intrinsically Rewarding

An activity or action that is rewarding in itself, providing a sense of satisfaction and fulfillment without the need for external rewards.

Engaged

Being actively involved or committed to a particular activity, cause, or task.

Flow

The psychological state of being completely immersed and fully engaged in an activity, often leading to optimal performance and enjoyment.

Challenging

Describes something that is demanding and tests one's abilities, often in a way that is stimulating or rewarding.