Auto Transmissions Is Expected to Pay Annual Dividends of $1

question 95

Multiple Choice

Auto Transmissions is expected to pay annual dividends of $1.90 and $2.10 over the next two years, respectively. After that, the company expects to pay a constant dividend of $2.30 a share. What is the value of this stock at a required return of 15 percent?

• A) $13.67
• B) $14.21
• C) $14.83
• D) $15.08
• E) $15.60

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Definitions:

Smoking

The process of breathing in and out smoke from tobacco or a substance.

Correlation

A statistical measurement that indicates the extent to which two or more variables fluctuate together.

Relationship

The way in which two or more concepts, objects, or people are connected, or the state of being connected.

Correlation

A statistical measure that indicates the extent to which two variables fluctuate together.