If a Stock Pays a $1 Dividend Every Year and the Required

question 21

Multiple Choice

If a stock pays a $1 dividend every year and the required rate of return on stocks of this type is 25%,then the share price should be

• A) $1
• B) $2
• C) $3
• D) $4
• E) $5

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Definitions:

Morally Superior

The belief or stance that one's moral principles or ethics are better and more righteous than those of others.

Incompatible Interests

Conflicting desires or goals among individuals or groups that make it difficult to find a common ground.

Diverse Groups

Collections of individuals from various backgrounds and characteristics, including ethnicity, culture, gender, and age, leading to heterogeneity in a population or organization.

Social Conflict

Disagreements or disputes between social groups that can arise from differences in interests, beliefs, or values.