What Should Be the Price of a Share That Constantly

question 89

Multiple Choice

What should be the price of a share that constantly pays $2.50 annually in dividends,if the growth rate is zero and the required rate of return is 8% per annum?

• A) $22.86
• B) $28.00
• C) $31.25
• D) $33.75

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Definitions:

Extreme Hostility

An intense form of aversion or aggression towards individuals or ideas, often manifesting in aggressive behavior or confrontation.

Cynicism

A negative attitude or skepticism towards something, often manifesting as mistrust or disenchantment with organizational initiatives or management.

Type A Behaviour

A personality trait characterized by high levels of competitiveness, impatience, aggressiveness, and a constant sense of urgency.

Physiologically Risky

Situations or activities that pose a potential danger or threat to the physical health or well-being of individuals.