A Stock Just Paid an Annual Dividend of $0

question 44

Multiple Choice

A stock just paid an annual dividend of $0.80 a share, and the dividend is expected to grow at 8 percent for 2 years and 3 percent thereafter. The required return is 9 percent. What is the stock price?

• A) $15.36
• B) $15.64
• C) $15.97
• D) $15.06
• E) $15.21

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Definitions:

Point Estimate

A single value given as an estimate of a population parameter, typically derived from a sample.

Standard Error

The statistical metric that represents the dispersion within a sample's distribution, often applied to the average.

Population Proportion

The share or fraction of a population that exhibits a particular attribute or characteristic.

Population Proportion

The ratio of members in a group that have a characteristic of interest to the total number of individuals in the population.