Firm X Will a Dividend of $10 Next Year and Its

question 11

Multiple Choice

Firm X will a dividend of $10 next year and its stock is expected to sell at $100 after the payment.Firm Y pays no dividend but its stock is expected to sell at $110.Dividends are taxed at 30% and capital gains are untaxed.If both stocks offer an after-tax return of 8%,what is the price of the two stocks?

• A) Price of X = $101.85; price of Y = $101.85
• B) Price of X = $99.07; price of Y = $101.85
• C) Price of X = $100; price of Y = $101.85
• D) Price of X = $99.07; price of Y = $100

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Definitions:

Social Cognitive Theorists

Researchers who study how individuals learn and behave in social contexts, focusing on the interplay of mental processes and social interaction.

Observation

The active acquisition of information from a primary source, using senses or instruments, to gather and record data for analysis.

Reinforcement

In behavioral psychology, it is the process of encouraging or establishing a pattern of behavior by offering rewards or positive outcomes.

Assimilation

According to Piaget, the incorporation of new events or knowledge into existing schemes.