The Shoe Box Will Not Pay a Dividend for the Next

question 32

Multiple Choice

The Shoe Box will not pay a dividend for the next two years.The following two years,it will pay annual dividends of $1 per share.Starting in year 5,the dividends will increase by 4 percent annually.The discount rate is 8 percent.What is the value of this stock today?

• A) $18.18
• B) $20.64
• C) $22.63
• D) $24.08
• E) $27.09

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Definitions:

Memory Functioning

Refers to the processes involved in storing, retaining, and recalling information in the human brain.

Inconsequential

Lacking importance or significance.

Material

Physical substances from which objects are made or composed, often categorized by their properties such as strength, elasticity, or durability.

Stimulus

An event or object in the environment that evokes a response or reaction from an organism.