Main Street Antiques Is Planning on Paying an Annual Dividend

question 91

Multiple Choice

Main Street Antiques is planning on paying an annual dividend of $2.60 per share next year. The company is slowly downsizing and is decreasing its dividend by 2 percent annually. What is the current value of this stock at a discount rate of 12 percent?

• A) $12.86
• B) $14.12
• C) $15.78
• D) $16.00
• E) $18.57

---

Definitions:

Total Activity Cost

The complete cost associated with a specific business activity, encompassing both direct and indirect expenses.

Activity Costs

Expenses tied to specific activities, such as production or research and development, often used in activity-based costing.

Prevention Cost

Expenses incurred to avoid defects in products or services, including costs associated with quality planning, training, and process control.

Finished Products

Goods that have completed the manufacturing process and are ready for sale to customers.