A Firm Has 120,000 Shares of Stock Outstanding,a Sustainable Rate

question 42

Multiple Choice

A firm has 120,000 shares of stock outstanding,a sustainable rate of growth of 3.8%,and $648,200 in next year's free cash flow.What value would you place on a share of this firm's stock if you require a 14% rate of return?

• A) $48.09
• B) $52.96
• C) $54.02
• D) $61.58

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Definitions:

Backchannel

Forms of communication feedback that indicate a listener's attention and understanding to the speaker, such as nodding or making verbal affirmations.

Question and Answer

A format of dialogue where inquiries are posed and responses are given, often used for information exchange or clarification.

Audience Profile

A detailed description of the characteristics, behaviors, motivations, and needs of a brand's target audience, used to tailor marketing strategies.

Analyzing the Situation

The process of examining the elements or structure of a problem to understand its composition and implications.