What Should You Pay for a Stock If Next Year's

question 94

Multiple Choice

What should you pay for a stock if next year's annual dividend is forecast to be $5.25,the constant-growth rate is 2.85%,and you require a 15.5% rate of return?

• A) $31.25
• B) $38.87
• C) $41.50
• D) $42.68

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Definitions:

Coarse Adjustment

The feature on a microscope that allows for large, rapid changes in focus, usually done before fine adjustments.

Objectives

Specific, measurable goals set to achieve desired outcomes in various contexts, such as projects or personal development.

Breast Biopsy

A diagnostic procedure involving the removal of tissue or cells from the breast to examine the presence or extent of disease, typically cancer.

Malignancy

The presence of cancerous cells that have the ability to grow uncontrollably and spread to other parts of the body.