Given That Dividends on a Share Are Expected to Remain

question 40

Multiple Choice

Given that dividends on a share are expected to remain indefinitely at $1 p.a.and that the required rate of return for the level of risk on such a share is 15%,the correct price for this share:

• A)cannot be ascertained from this information.
• B)cannot be ascertained without regard to the management structure of the firm.
• C)is $1.
• D)is $6.67.

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