Financial Analysts Forecast Target Corp

question 101

Multiple Choice

Financial analysts forecast Target Corp. (TGT) growth for the future to be 11 percent. Their recent dividend was $0.52. What is the value of their stock when the required rate of return is 11.89 percent?

• A) $5.25
• B) $6.48
• C) $58.43
• D) $64.85

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Definitions:

Incremental Revenue

The additional revenue generated from a new business activity or decision.

Incremental Processing Costs

Additional costs incurred when increasing the production volume or when processing further beyond the split-off point.

Sell or Process Further

A decision-making process in cost accounting where a company must determine whether to sell a product as is or continue processing to add value.

Annual Rate of Return

The percentage return on an investment over a one-year period, encompassing both capital gains and interest payments.