You Want to Purchase Some Shares of Green World Stock

question 105

Multiple Choice

You want to purchase some shares of Green World stock but need a 15 percent rate of return to compensate for the perceived risk of such ownership.What is the maximum you are willing to spend per share to buy this stock if the company pays a constant $0.90 annual dividend per share?

• A)$5.40
• B)$6.00
• C)$6.90
• D)$7.20
• E)$7.80

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Definitions:

Least Risky Strategy

describes the approach or plan of action that exposes an entity to the minimal amount of risk or potential for loss.

Rapidly Aging Population

A demographic trend where the median age in a population increases significantly due to rising life expectancy and/or declining birth rates.

One-Child Policy

A former Chinese government policy aimed at controlling the population by limiting families to having only one child.

Global Expansion

The strategy of a business to enter and compete in international markets, broadening its geographic footprint and customer base.