A Company Currently Pays a Dividend of $4

question 114

Multiple Choice

A company currently pays a dividend of $4.00 per share. It expects the growth rate of the dividend to be 3% (0.03) annually. If the interest rate is 6% (0.06) what does the dividend- discount model predict the current price of the stock should be?

• A) $103.33
• B) it doesn't, you need an expected future selling price to use the model.
• C) $ 137.33
• D) $66.67

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Definitions:

Human Resource Plans

Strategic documents outlining how an organization intends to manage its workforce to meet its business goals, including staffing, development, and compensation strategies.

Recruiters

Individuals or agencies involved in the process of finding and hiring candidates for job vacancies.

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A record of an individual's criminal history, including arrests, convictions, and other judicial dispositions.