Each of Two Stocks,C and D,are Expected to Pay a Dividend

question 13

Multiple Choice

Each of two stocks,C and D,are expected to pay a dividend of $3 in the upcoming year.The expected growth rate of dividends is 9% for both stocks.You require a rate of return of 10% on stock C and a return of 13% on stock D.The intrinsic value of stock C _____.

• A)will be greater than the intrinsic value of stock D
• B)will be the same as the intrinsic value of stock D
• C)will be less than the intrinsic value of stock D
• D)cannot be calculated without knowing the market rate of return
• E)none of the above is true.

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Definitions:

Comparative Negligence

A principle of tort law that compares the fault of each party involved in an accident and allocates the damages accordingly.

Forgeries

The act of fraudulently making or altering a document or item with the intent to deceive.

Plaintiff-Depositor

A plaintiff-depositor refers to an individual who deposits funds or assets and subsequently becomes a plaintiff in a legal action related to those deposits.

Endorsements

Signatures or instructions written on the back of a negotiable instrument or document, indicating the transfer of rights to another party.