Suppose You Know That a Company's Stock Currently Sells for $65

question 34

Multiple Choice

Suppose you know that a company's stock currently sells for $65 per share and the required return on the stock is 14 percent. You also know that the total return on the stock is evenly divided between capital gains yield and a dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share?

• A) $3.67
• B) $4.25
• C) $4.64
• D) $5.01
• E) $5.28

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Definitions:

Collective Bargaining Relationships

The ongoing interactions between employers and a group of employees, often represented by a union, aimed at negotiating employment terms.

Workers Initiative

Pertains to actions taken by employees on their own accord to improve processes, productivity, or workplace environment, demonstrating proactive engagement.

Federal Civil Servants

Employees who work for the federal government, performing duties that range from administrative to specialized roles.

Public Service Staff Relations Act

Legislation governing labor relations within the public service, including the rights and responsibilities of public servants and their employers.