Parcel Corporation Expects to Pay a Dividend of $5 Per

question 37

Multiple Choice

Parcel Corporation expects to pay a dividend of $5 per share next year,and the dividend payout ratio is 50%.If dividends are expected to grow at a constant rate of 8% forever,and the required rate of return on the stock is 13%,calculate the present value of growth opportunities.

• A)$100.00
• B)$76.92
• C)$23.08

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Definitions:

Printing More Money

The action taken by a country's central bank to increase the money supply, often leading to inflation if not managed properly.

Gini Coefficient

A measure used to express the distribution of income or wealth within a population, indicating inequality levels.

Wealth

Wealth represents the abundance of valuable financial assets or material possessions, which can be accumulated, saved, and invested over time to increase an individual's or entity's financial security and economic standing.

Open Market Operations

Operations by a central bank to buy or sell government bonds, corporate bonds, or equities.