What Should Be the Price of a Stock That Offers

question 62

Multiple Choice

What should be the price of a stock that offers a $4.32 annual dividend with no prospects of growth,and has a required return of 12.5%?

• A) $0
• B) $4.86
• C) $34.56
• D) $30.24

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Definitions:

Earliest Costs

Refers to the initial expenses or purchase prices of inventory items, typically considered for cost calculation in accounting methods like LIFO (Last-In, First-Out).

Ending Inventory

The final value of goods available for sale at the end of an accounting period, calculated based on beginning inventory plus purchases minus cost of goods sold.

Safeguarding Inventory

The actions and practices involved in protecting inventory from loss, theft, or damage.

Restricted Areas

Zones within a workplace or public space that have limitations on access or use, typically for safety or security reasons.