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

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Definitions:

Equity Sensitivity

An individual’s preference for fairness and equity in their interactions and distributions of resources with others.

Primary Needs

Fundamental human requirements including physiological and safety needs that are essential for survival.

Workforce Entrants

Individuals who are newly entering the job market, either for the first time or after a significant break.

Procedural Justice

The fairness perceived in the processes and procedures used to make decisions and allocate resources.