Ultra Fine Furnishings Is in the Process of Selling Its

question 38

Multiple Choice

Ultra Fine Furnishings is in the process of selling its peripheral businesses and focusing on its upscale clients.In conjunction with this reorganization,the dividend will be decreased by 10 percent for the next three years.After that,the dividend will resume increasing at an annual rate of 5 percent.The required return on this stock is 14 percent and the last dividend paid was $2.40 a share.What is one share of this stock worth today?

• A) $17.34
• B) $18.08
• C) $18.35
• D) $19.68
• E) $20.72

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Definitions:

Sunlit Layer

The topmost layer of ocean or body of water that receives sunlight, allowing photosynthesis in aquatic ecosystems.

Lake

A sizable inland body of water, usually freshwater, surrounded by land.

Littoral Zone

The area of a sea, lake, or river that is close to the shore and shallow enough for sunlight to penetrate, allowing plant growth.

Nutrient Trap

A mechanism or feature in an ecosystem that captures and retains nutrients, preventing them from being lost and thereby enhancing nutrient availability.