What Should Be the Price of a Stock That Offers

question 62

Multiple Choice

What should be the price of a stock that offers a $4.32 annual dividend with no prospects of growth,and has a required return of 12.5%?

• A) $0
• B) $4.86
• C) $34.56
• D) $30.24

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Definitions:

Agricultural Output

The total amount of agricultural products, including crops and livestock, produced within a specific time frame.

Technological Improvements

Technological improvements involve the application of better solutions that meet new requirements or existing market needs, often leading to increased efficiency and productivity.

Demand Inelastic

A situation where the quantity demanded of a good or service changes minimally in response to price changes.