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

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Definitions:

Level of Employment

The total number of people employed in the economy at a given time, reflecting the jobs available and workforce participation.

Monopsonist

A market condition where there is only one buyer facing many sellers, giving the buyer significant control over prices.

Labor Supply Curve

A graphical representation that shows the relationship between the wage rate and the quantity of labor that workers are willing to supply.

Marginal Expenditure

The extra expense associated with making an additional unit of a product or service.