Given That Dividends on a Share Are Expected to Remain

question 29

Multiple Choice

Given that dividends on a share are expected to remain indefinitely at $0.50 p.a.and that the required rate of return for the level of risk on such a share is 10% and the interest rate is 6%,the correct price for this share is:

• A)$8.33.
• B)$5.
• C)$3.
• D)none of the options given.

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Definitions:

Skewed Distribution

A statistical term for a distribution where the bulk of values are located on one side of the mean, resulting in a lack of symmetry.

Degree Of Variation

Degree Of Variation refers to the extent to which values of a particular variable or trait differ from each other in a set of data or population.

Standard Deviation

A measure of the amount of variation or dispersion in a set of values, often used in statistics.

Distribution Of Scores

Refers to the way in which scores are spread out or distributed across a range in a dataset.