Southern Foods Just Paid an Annual Dividend of $1

question 102

Multiple Choice

Southern Foods just paid an annual dividend of $1.10 a share.Management estimates the dividend will increase by 10 percent a year for the next four years.After that,the annual dividend growth rate is estimated at 3.2 percent.The required rate of return is 12 percent.What is the value of this stock today?

• A) $12.55
• B) $13.00
• C) $14.54
• D) $15.81
• E) $16.21

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Definitions:

Great Salt Lake Valley

The valley in northern Utah, home to the Great Salt Lake, settled by Mormon pioneers in the mid-19th century.

Reform Movement

A collective effort aimed at making changes in society through improvements in legal, social, or political institutions, often driven by public concern for moral or efficient governance.

Temperance Movement

A social movement against the consumption of alcoholic beverages, prominent in the 19th and early 20th centuries, leading to the Prohibition era in the United States.

Antiprostitution Movement

Social and legal campaigns aimed at prohibiting or reducing prostitution based on moral, health, or social concerns.