What Should Be the Current Price of a Share of Stock

question 13

Multiple Choice

What should be the current price of a share of stock if a $5 dividend was just paid,the stock has a required return of 20%,and a constant dividend growth rate of 6%?

• A) $19.23
• B) $25.00
• C) $35.71
• D) $37.86

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Definitions:

Hypothalamus

A region of the brain responsible for the regulation of many bodily functions, including hunger, thirst, temperature, and the release of hormones from the pituitary gland.

Overeating

The consumption of more calories than the body needs for energy, often leading to weight gain and other health issues.

Undereating

Consuming fewer calories than the body needs to maintain a healthy functioning, which can lead to nutritional deficiencies and health issues.

Pima Indians

A Native American group living in what is now Arizona and Mexico, often studied in medical and nutritional research due to their high prevalence of type 2 diabetes.