What Is the Required Return for a Stock That Has

question 88

Multiple Choice

What is the required return for a stock that has a 6% constant-growth rate,a price of $25,an expected dividend of $2,and a P/E ratio of 10?

• A) 5%
• B) 10%
• C) 14%
• D) 22%

---

Definitions:

Asch's Studies

A series of experiments designed to demonstrate the power of conformity in groups, conducted by Solomon Asch.

Breaking Conformity

The act of challenging and going against established norms, traditions, or expectations in society.

Cognitive Dissonance

Cognitive dissonance is the mental discomfort experienced by a person who holds two or more contradictory beliefs, ideas, or values at the same time.

Respected Professor

An academic educator or researcher held in high esteem by colleagues and students.