Jarrett Corp Management Believes That After 2015 Jarrett Will Grow at a Following

question 60

Multiple Choice

Jarrett Corp.
At the end of 2010 Jarrett Corp.developed the following forecasts of net income:
$\begin{array}{lccc}& \text {Forecasted } \\ \text { Year: }& \text { Net Income} \\2011&\$20, 856\\2012&\$22,733\\2013&\$24,552\\2014&\$27,252\\2015&\$ 29.978\\\end{array}$

Management believes that after 2015 Jarrett will grow at a rate of 7% each year.Total common shareholders' equity was $112,768 on December 31, 2010.Jarrett has not established a dividend and does not plan to paying dividends during 2011 to 2015.Its cost of equity capital is 12%.
-Assume that a firm's book value at the beginning of the year is $17,800 and that the firm reports net income of $6,200.If the firm's book value at the end of the year is $20,000 what was the amount of dividends paid during the year?

• A) $4,000
• B) $8,800
• C) $2,200
• D) Insufficient information to determine

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Definitions:

Breeding Populations

Groups of organisms that are selected and mated to perpetuate certain genetic traits or to increase the genetic diversity of offspring.

Isolating Factors

Conditions or barriers that inhibit the interaction, interbreeding, or cultural exchange between populations, leading to differentiation or speciation in biology, or cultural divergence.

Adaptive Function

Refers to the way behaviors or traits contribute to an organism's survival and reproductive success in its environment.

Genetic Level

Pertaining to or influenced by the genes, which are the units of heredity within the living organisms' DNA.