What Is the Estimated Value of a Stock with a Required

question 44

Multiple Choice

What is the estimated value of a stock with a required rate of return of 12 percent,a projected constant growth rate of dividends of 7 percent and expected dividend of $2.50?

• A)$60
• B)$15
• C)$150
• D)$5

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Definitions:

Promotion-to-Sales Ratio

A metric that compares the cost of marketing and promotion activities to the revenue generated from sales.

Break-Even Points

The point at which total costs and total revenues are equal, meaning the business is neither making a profit nor a loss.

Return on Investments

A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the benefit (return) of an investment by the cost of the investment.

Competitors

Other businesses or products that offer similar solutions or target the same customers within a market.