The Next Dividend Payment (One Year from Now)by Bacon Signs

question 64

Multiple Choice

The next dividend payment (one year from now) by Bacon Signs Inc.,will be $2.50 per share.The dividends are anticipated to maintain a 2% growth rate,forever.If the required rate of return for Bacon Signs Inc.is 11%,what is the current price per share:

• A)$27.78.
• B)$28.33.
• C)$19.23.
• D)$19.62.

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Definitions:

Gross Income

The total income from all sources before any deductions or taxes are taken out.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services delivered but not yet paid for.

Inventory

Inventory encompasses the goods and materials a business holds for the purpose of resale or production.

Management

The process of dealing with or controlling things or people, often within the context of business operations like organizing, planning, and overseeing.