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Nu-Tek,Inc

question 51

Multiple Choice

Nu-Tek,Inc.is expecting a period of intense growth and has decided to retain more of its earnings to help finance that growth.As a result it is going to reduce its annual dividend by 10% a year for the next three years.After that,it will maintain a constant dividend of €.70 a share.Last month,the company paid €1.80 per share.What is the value of this equity if the required rate of return is 13%?

Definitions:

Portfolio Composition

The mix of different types of investments held in an investor's portfolio, determined based on their risk tolerance, investment goals, and time horizon.

Alpha-Seeking

Refers to investment strategies aimed at achieving returns that exceed the benchmarks or indices against which they are compared, often through active management.

Relative Mispricing

A situation where the price of an asset does not accurately reflect its value, usually in comparison to similar assets.

Market Exposure

The degree to which an investment or portfolio is exposed to market risk.