KL Airlines Paid an Annual Dividend of $1

question 80

Multiple Choice

KL Airlines paid an annual dividend of $1.18 a share last month.The company is planning on paying $1.50,$1.75,and $1.80 a share over the next 3 years,respectively.After that,the dividend will be constant at $1.50 per share per year.What is the market price of this stock if the market rate of return is 10.5 percent?

• A)$13.98
• B)$14.07
• C)$14.71
• D)$17.16
• E)$18.10

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Definitions:

Variable-Ratio

In behavioral psychology, a schedule of reinforcement where a response is rewarded after an unpredictable number of responses.

Reinforcement

In psychology, any event that strengthens or increases the likelihood of a specific response or behavior by providing a consequence an individual finds rewarding.

Local Theater

A venue for performing arts in a community, providing a stage for live performances such as plays, musicals, and other theatrical productions.

Positive Reinforcement

A method in behavior science that increases the likelihood of a behavior by following it with a desirable outcome or reward.