The Annual Dividends Paid by a Certain Stock Are Expected

question 24

Multiple Choice

The annual dividends paid by a certain stock are expected to grow at 3.5 percent per year forever. The required return on the stock is 13.5 percent, and the current stock price is $24.40. You own 300 shares of this stock, what is the total amount of dividend income you should expect next year?

• A) $621
• B) $810
• C) $732
• D) $514
• E) $706

---

Definitions:

Market Research

The systematic gathering, recording, analyzing, and interpretation of data about market conditions, competitors, and consumers for decision-making purposes.

Scheduling

The process of organizing, planning, and arranging activities or tasks within a given timeframe to ensure efficient use of time and resources.

Fear Appeal

A marketing strategy that uses the notion of fear to motivate the audience to take action, often by highlighting negative consequences of not using a product or service.

Prudential

A financial services brand known for insurance, investment management, and other financial products and services.