The Next Dividend (Div₁) Is $1

question 5

Multiple Choice

The next dividend (Div₁) is $1.80, the growth rate (g) is 6%, and the required rate of return (r) is 12%. What is the stock price, according to the constant growth dividend model?

• A) $31.80
• B) $30.80
• C) $30.00
• D) $15.00

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Definitions:

Histogram

A graphical representation of data using bars of different heights to show the frequency of data in adjacent intervals.

Frequency Distribution

A statistical analysis showing the number of occurrences of each distinct value in a set of data.

Binge Drinking

The consumption of an excessive amount of alcohol in a short period of time, often defined as five or more drinks for males, and four or more drinks for females in about two hours.

Frequency Distribution

A representation, often in table or graph form, showing how often different values occur in a dataset.