If the Dividend Yield for Year 1 Is Expected to Be

question 81

Multiple Choice

If the dividend yield for year 1 is expected to be 5% based on a stock price of $25,what will the year 4 dividend be if dividends grow annually at a constant rate of 6%?

• A) $1.33
• B) $1.49
• C) $1.58
• D) $1.67

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Definitions:

Tangible Assets

Physical and measurable assets owned by a business, such as machinery, buildings, and inventory, as opposed to intangible assets like patents or copyrights.

Inventory

The total amount of goods and materials held by a company in stock, awaiting sale or use in production.

Equipment

Tangible assets used in the operation of a business, excluding inventory and fixed assets like buildings; includes machinery, vehicles, and furniture.

Building

A structure with a roof and walls, such as a house, school, or factory, used for various purposes.