A Firm Does Not Pay a Dividend

question 86

Multiple Choice

A firm does not pay a dividend. It is expected to pay its first dividend of $0.10 per share in two years. This dividend will grow at 11 percent indefinitely. Using a 13 percent discount rate, compute the value of this stock.

• A) $4.42
• B) $4.59
• C) $5.43
• D) $7.21

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Definitions:

Cognitive Conflict

Disagreement that focuses on problem- and issue-related differences of opinion.

Storming Stage

The storming stage is a phase in team development marked by conflict and competition as members vie for positions and challenge group norms.

Team Cohesiveness

Extent to which team members feel attracted to the team and motivated to remain part of it.

Work From Home

A flexible working arrangement that allows employees to perform their job tasks from a remote location, often their home.