A Stock Is Expected to Pay a $4

question 112

Multiple Choice

A stock is expected to pay a $4.00 dividend per share. The growth rate is expected to be −1 percent. If investors demand 8 percent on this stock, what is the expected price of the stock three years from now?

• A) $54.68
• B) $52.17
• C) $41.06
• D) $43.12

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Definitions:

Wind

The flow of gases on a large scale, primarily on Earth's surface, resulting from air moving from high pressure to low pressure areas.

Sedimentary Rocks

Rocks formed by the deposition and subsequent cementation of mineral or organic particles on the floor of oceans or other bodies of water.

Rock Forms

The various shapes and structures that rocks can take, including layered formations, intrusions, and extrusions.

Angular Clasts

Rock fragments with sharp edges that result from mechanical weathering processes.