A Stock Paying $5 in Annual Dividends Currently Sells for $80

question 58

Multiple Choice

A stock paying $5 in annual dividends currently sells for $80 and has an expected return of 14%.What might investors expect to pay for the stock one year from now after the next dividend has been paid?

• A) $82.20
• B) $86.20
• C) $87.20
• D) $91.20

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Definitions:

Job Benefit

Advantages or perks offered by employers to employees, beyond wages or salaries, such as health insurance, retirement plans, or paid time off.

Quid Pro Quo

A Latin phrase meaning "something for something," which refers to a mutual agreement where a service or good is exchanged for another service or good of equivalent value.

Sexual Harassment

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature in a workplace, or academic environment.

Promotion

The act of raising someone to a higher position or rank within an organization.