Shackleford Corporation Net Income This Year Is $800,000

question 41

Multiple Choice

Shackleford Corporation net income this year is $800,000.The company generally retains 35% of net income for reinvestment.The company's common equity currently has a book value of $5,000,000.They just paid a dividend of $1.37,and the required rate of return on this stock is 12%.Compute the value of this stock if dividends are expected to continue growing indefinitely at the company's internal growth rate.

• A) $22.61
• B) $11.42
• C) $15.63
• D) $4.35

---

Definitions:

Crystal Glass Bowls

Decorative or functional bowls made from crystal glass, valued for their clarity and craftsmanship.

Coal

A combustible black or brownish-black sedimentary rock used primarily as an energy source and in various industrial processes, including electricity generation.

Geographical Adjustments

Modifications made to strategies or operations to accommodate differences in geographical locations.

FOB Origin Pricing

A pricing term that indicates the buyer assumes responsibility for the goods once they leave the seller's premises and also bears the shipping costs.