Target Corp

question 70

Multiple Choice

Target Corp. (TGT) paid a $0.21 dividend per share in 2000, which grew to $0.52 in 2007. This growth is expected to continue. What is the value of this stock at the beginning of 2007 when the required rate of return is 14.77 percent?

• A)$3.52
• B)$55.32
• C)$62.97
• D)$63.49

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Definitions:

Dividend Payout Ratio

The fraction of net earnings a firm pays to its shareholders as dividends, usually expressed as a percentage.

Profit Margin

A measure of profitability calculated as net income divided by revenue.

Equity Financing

The method of raising capital through the sale of shares in a company, giving investors ownership interests.

Current Liabilities

Obligations or debts a company expects to settle within one fiscal year or its operating cycle, whichever is longer.