Langley Enterprises Pays a Constant Dividend of $0

question 73

Multiple Choice

Langley Enterprises pays a constant dividend of $0.85 a share.The company announced today that it will continue to pay the dividend for another 2 years after which time all dividends will cease.What is one share of this stock worth today if the required rate of return is 16.5 percent?

• A)$0.92
• B)$1.36
• C)$2.04
• D)$2.09
• E)$2.20

---

Definitions:

Consumerism

The promotion of consumer interests and the emphasis on the acquisition of goods and services as a central aspect of society.

Culture Constraint

Limitations and boundaries on individual behavior and social practices imposed by cultural norms and values.

Rationalization

The process of making activities or tasks more efficient and systematic, often through the implementation of rules, regulations, and procedures.

McDonaldization

A term used to describe the process by which the principles of the fast-food industry, such as efficiency and uniformity, are coming to dominate other sectors of society.